Bloomberg: SpaceX-Tesla merger could be announced as early as December, but three hurdles remain
Bloomberg reported on November 12, citing people familiar with the matter, that merger talks between Elon Musk’s SpaceX and Tesla have made progress. An announcement could come as early as December, though it could also be delayed until early 2027. That would be a significant acceleration from Bloomberg’s earlier forecast in late October, which put the announcement in the first half of 2027.
If this landmark deal is ultimately approved, it would be the largest merger and acquisition in history. However, the two companies still face three major challenges before they can merge.
Who acquires whom? How big is the deal?
Based on U.S. stock market closing data from November 12:
Tesla: Closed at $397.45 (up 1.69%), with a market capitalization of about $1.571 trillion.
SpaceX (ticker: SPCX): Closed at $139.94 (up 0.14%), with a market capitalization of about $1.9 trillion.
Combined market capitalization: As much as $3.47 trillion.
Market analysts broadly believe this would be a deal in which SpaceX absorbs Tesla. (The main uncertainty is how many SpaceX shares Tesla shareholders would receive.) In terms of corporate control, Musk owns about 20% of Tesla, but controls more than 80% of the voting rights at SpaceX through supervoting shares. After the merger, Tesla shareholders would move from a “one share, one vote” structure into a company under Musk’s absolute control.
Moreover, SpaceX is no longer simply a rocket company. In February this year, it formally folded Musk’s AI company xAI into its business. In the third quarter, its AI division—now renamed Super Intelligence—generated $7.56 billion in revenue, surpassing Starlink’s $5.248 billion for the first time to become SpaceX’s largest source of revenue. The two companies are also working together to build a large chip factory, Terafab, in Texas.
Three hurdles to a merger
Tesla’s China business:
JPMorgan analysts have pointed out that SpaceX holds a large number of U.S. defense and government contracts, creating a potential conflict of interest with Tesla’s substantial and profitable manufacturing operations in China. This could prompt scrutiny from regulators and shareholders.
A new U.S. Congress investigation:
With Democrats winning control of both chambers in the November midterm elections, the new Congress is expected to take office in January 2027 and has already said it will closely investigate Musk’s business and political ties.
Tesla shareholder voting threshold:
Musk has said that both companies have established special committees of independent directors to assess the deal, but that he will not take part in the decision because of his conflicts of interest. Tesla shareholders must meet the high threshold of “approval by more than half of all outstanding shares”—not merely a majority of shares represented at the meeting—which will require an additional shareholder vote.
Bloomberg reported on November 12, citing people familiar with the matter, that merger talks between Elon Musk’s SpaceX and Tesla have made progress. An announcement could come as early as December, though it could also be delayed until early 2027. That would be a significant acceleration from Bloomberg’s earlier forecast in late October, which put the announcement in the first half of 2027.
If this landmark deal is ultimately approved, it would be the largest merger and acquisition in history. However, the two companies still face three major challenges before they can merge.
Who acquires whom? How big is the deal?
Based on U.S. stock market closing data from November 12:
Tesla: Closed at $397.45 (up 1.69%), with a market capitalization of about $1.571 trillion.
SpaceX (ticker: SPCX): Closed at $139.94 (up 0.14%), with a market capitalization of about $1.9 trillion.
Combined market capitalization: As much as $3.47 trillion.
Market analysts broadly believe this would be a deal in which SpaceX absorbs Tesla. (The main uncertainty is how many SpaceX shares Tesla shareholders would receive.) In terms of corporate control, Musk owns about 20% of Tesla, but controls more than 80% of the voting rights at SpaceX through supervoting shares. After the merger, Tesla shareholders would move from a “one share, one vote” structure into a company under Musk’s absolute control.
Moreover, SpaceX is no longer simply a rocket company. In February this year, it formally folded Musk’s AI company xAI into its business. In the third quarter, its AI division—now renamed Super Intelligence—generated $7.56 billion in revenue, surpassing Starlink’s $5.248 billion for the first time to become SpaceX’s largest source of revenue. The two companies are also working together to build a large chip factory, Terafab, in Texas.
Three hurdles to a merger
Tesla’s China business:
JPMorgan analysts have pointed out that SpaceX holds a large number of U.S. defense and government contracts, creating a potential conflict of interest with Tesla’s substantial and profitable manufacturing operations in China. This could prompt scrutiny from regulators and shareholders.
A new U.S. Congress investigation:
With Democrats winning control of both chambers in the November midterm elections, the new Congress is expected to take office in January 2027 and has already said it will closely investigate Musk’s business and political ties.
Tesla shareholder voting threshold:
Musk has said that both companies have established special committees of independent directors to assess the deal, but that he will not take part in the decision because of his conflicts of interest. Tesla shareholders must meet the high threshold of “approval by more than half of all outstanding shares”—not merely a majority of shares represented at the meeting—which will require an additional shareholder vote.