SpaceX, Tesla merger talks advance, potential deal valued at $3.45 trillion

Elon Musk's SpaceX and Tesla are making progress in discussions over a possible merger that could create a company with a combined market value of about $3.45 trillion, according to a report by Bloomberg News cited by Reuters.

Elon Musk’s SpaceX and Tesla are making progress in discussions over a possible merger that could create a company with a combined market value of about $3.45 trillion, according to a report by Bloomberg News cited by Reuters.

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The companies have formed special committees of independent directors to examine a potential combination. The committees are reviewing possible deal structures, governance arrangements and share-exchange terms, although no merger agreement has been announced.

SpaceX had a market value of about $1.90 trillion and Tesla approximately $1.55 trillion at the previous market close, Reuters reported on Thursday, citing Bloomberg. The combined figure represents their separate market valuations, not an agreed price for a merger.

Musk said during SpaceX’s third-quarter earnings call in October that a merger would be “a good idea”, confirming that both companies had established independent-director committees to consider the proposal. He also said he was excluded from their discussions because of a potential conflict of interest.

A merger would bring together Tesla’s electric vehicles, energy storage business and humanoid robot programme with SpaceX’s rocket operations and Starlink satellite internet network. SpaceX also has interests in artificial intelligence through its combination with Musk’s xAI.

The companies are already involved in a joint semiconductor project known as Terafab. Musk said the venture expected to produce its first test chip around May or June 2027, with volume production targeted for the third quarter of 2028.

Their separate Bitcoin holdings could also become part of a combined corporate balance sheet if a merger proceeds. Filings showed that SpaceX and Tesla held a total of 30,221 bitcoins between them as of June 30, although the companies have not reported a joint holding.

The potential merger faces significant regulatory and national security challenges, particularly because SpaceX has US government and defence contracts while Tesla operates major manufacturing facilities in China, including its Shanghai plant.

Regulators in both countries could scrutinise how sensitive US defence-related information and technology would be protected from access through Tesla’s Chinese operations.

Musk’s differing ownership positions in the two companies could also complicate negotiations. He owns nearly 20 percent of Tesla and holds voting control at SpaceX, according to Reuters.

Any transaction would require approval through the companies’ corporate governance processes. SpaceX has said a potential combination would require approval from its special committee, board and controlling shareholder. Tesla’s shareholders would also have a significant role in determining whether a deal proceeds.

Reuters reported on Thursday that an announcement could come as early as December, although discussions could continue into early 2027. Neither company had announced a definitive agreement.