SpaceX and Tesla move closer to a record merger that could be announced as soon as December, Bloomberg reports

What's the deal? SpaceX and Tesla are making progress in merger talks and could announce a combination as soon as December, Bloomberg reported on Thursday, citing people familiar with the matter. The two companies have also discussed a scenario in which an announcement slips into early 2027. Their boards and advisers are now working through the terms and the governance structure of the combined company. Neither company commented, and no final agreement has been reached.

The biggest deal ever: SpaceX has been valued at more than $1.9 trillion since its June IPO, and Tesla at about $1.5 trillion, so a combined group would be worth roughly $3.4 trillion. That would dwarf the long-standing record for a single deal, Vodafone's $183 billion takeover of Mannesmann in 2000. A key open question is how many SpaceX shares Tesla investors would receive, which points to SpaceX absorbing Tesla rather than the other way around. Tesla shares rose as much as 1.9% to $398.35 on the report.

Context: Elon Musk last month called a merger a "good idea", and both boards have formed special committees to explore it. The companies already work together on the Terafab chip project in Texas, and a deal would bring Tesla's cars, energy storage and Optimus robots under one roof with SpaceX's rockets, Starlink and AI infrastructure. Tesla holds its annual shareholder meeting on 3 December.

What needs solving: According to Bloomberg, one of the main issues is how to ring-fence Tesla's business in China from SpaceX's US government and defence work. The deal could also draw scrutiny from the new Congress, where Democrats have pledged to look into Musk's business dealings.

Sources: Bloomberg, 12 November
Reuters, 12 November
Dow Jones via MarketScreener, 12 November
Electrek, 12 November
The Verge, 12 November