SpaceX-Tesla megamerger could be announced as soon as December

Bloomberg reports that a Tesla-SpaceX combination could be announced as soon as December, a deal that would instantly become the largest merger ever. Talks have narrowed to price and control, with boards and advisers on both sides at the table. December is the target, but early 2027 is also on the table. Neither company commented, and Tesla stock rose as much as 1.9% on the report.

One of the open variables is how many SpaceX shares Tesla investors would receive. That framing points to SpaceX absorbing Tesla, not the other way around. The valuations fit: SpaceX is worth over $1.9 trillion after its June IPO, while Tesla sits around $1.5 trillion. For scale, the record for a single deal belongs to Vodafone's $183 billion takeover of Mannesmann in 2000, and even SpaceX's roughly $250 billion purchase of xAI earlier this year would be dwarfed.

Musk first floated merging the two companies in May, weeks before the SpaceX IPO. Tesla's October proxy filing read like a board bracing for exactly this: Ira Ehrenpreis, who chairs Tesla's compensation and governance committees, has sat on SpaceX's board since February. The ballot for Tesla's December 3 annual meeting is limited to re-electing Musk and chair Robyn Denholm and JB Straubel to terms through 2029, plus a say-on-pay vote and the auditor. A day later, Musk confirmed both boards had formed special committees to explore a merger.

The governance math is the part Tesla shareholders should watch. Musk owns about 20% of Tesla but controlled roughly 85% of SpaceX's voting power through super-voting shares, according to its S-1. Swapping Tesla shares for SpaceX shares trades one-share-one-vote for a company where his control is effectively locked in. The deal also pays Musk: under change-in-control terms in his 2025 CEO award, operational milestones drop out, the market cap test runs at the deal price, and earned shares vest immediately. Based on the proxy's share count, a deal valuing Tesla at $2 trillion, about a 33% premium to where it trades now, would clear the first market cap tranche on the spot. His 286 million restricted shares from the 2018 package also accelerate.

Bloomberg reports one of the main obstacles is how to ring-fence Tesla's China business. A JPMorgan analyst described SpaceX's defense and government work and Tesla's China footprint as key dynamics at odds with each other for regulators and shareholders. That's the same issue behind the Wall Street Journal's July report that Tesla was weighing a sale or spinoff of its China operations, which Musk denied. Giga Shanghai builds more than half of Tesla's cars and shipped 67,829 vehicles in October alone.

Politics is the other wild card. Congress flipped to Democrats in the midterms, and they've said Musk's companies and his political ties will get a hard look. Bloomberg has previously reported the companies want to close before President Trump leaves office.