Musk Is Reportedly Preparing the Largest M&A Deal in History! SpaceX (SPCX.US) and Tesla, Inc. (TSLA.US) Said to Make Progress in Merger Talks, Deal Could Be Announced as Early as December

According to people familiar with the matter, merger talks between SpaceX (SPCX.US) and Tesla, Inc. (TSLA.US), Musk's two core companies, are making progress, and the two sides could announce a deal as early as December this year. The potential transaction is expected to become the largest M&A deal in global history and reshape the competitive landscape of the global technology industry. The people said the two companies are also discussing the possibility of delaying the announcement until early 2027. Currently, the boards of directors and advisory teams of both sides are in negotiations over key matters including the terms of the merger and the governance structure of the combined company. Boosted by the news, Tesla, Inc. shares rose 1.69% on Thursday, while SpaceX shares rose 0.14%. Combined Market Value of the Two Companies Exceeds US$3.4 Trillion; AI May Be the Core Driver of the Merger The merger of SpaceX and Tesla, Inc. would become a landmark deal in Wall Street's M&A market, creating a super technology group spanning electric vehicles, energy storage batteries, rocket launches and satellite communications. Currently, after completing its initial public offering (IPO) in June this year, SpaceX's market value has exceeded US$1.9 trillion, while Tesla, Inc.'s market value is approximately US$1.5 trillion. Combined, the two companies' market value exceeds US$3.4 trillion. The core rationale driving the merger is Musk's desire to apply artificial intelligence technology more broadly to areas such as space infrastructure, autonomous vehicles and humanoid Siasun Robot&Automation, and to accelerate this strategic goal by integrating resources across his companies. In recent years, SpaceX has evolved from a leading rocket manufacturer and launch service provider into a major global satellite internet service provider, while also becoming an important AI infrastructure supplier to artificial intelligence companies including Anthropic. Beyond its electric vehicle business, Tesla, Inc. has continued to increase its investment in autonomous driving, humanoid Siasun Robot&Automation and energy storage. The two companies' business footprints in artificial intelligence and related infrastructure are becoming increasingly intertwined. In fact, SpaceX and Tesla, Inc. have already established multiple business partnerships, including jointly advancing the construction of a semiconductor plant in Texas called Terafab. The two sides are also laying the groundwork for further integration of business operations in the future. Merger Still Faces Multiple Challenges Including Regulation and Corporate Governance However, before the potential transaction is formally completed, the two companies still need to resolve a series of complex issues, including the deal structure, shareholder interest arrangements and regulatory approvals. The people said the two sides are studying how to make appropriate isolation arrangements for Tesla, Inc.'s business in China to address regulatory requirements that the merger may involve. JPMorgan analyst Rajat Gupta noted in a research report last month that SpaceX holds important contracts involving the U.S. government and defense sector, while Tesla, Inc. has large-scale and highly profitable manufacturing operations in China. How to reconcile these two sets of interests will be an important consideration for the transaction to obtain regulatory and shareholder approval. In addition, the political environment after the U.S. midterm elections may also bring new uncertainty to the deal. Democrats won control of Congress in the midterm elections and have promised to investigate Musk's business and political activities. The merger of SpaceX and Tesla, Inc. may become an important case testing the new U.S. Congress's attitude toward mergers and acquisitions of large technology companies. Both Sides Have Established Special Committees; Share Exchange Ratio Becomes the Focus of Negotiations Musk said in October this year that the boards of both SpaceX and Tesla, Inc. had established special committees composed of independent directors to evaluate the possibility of a merger between the two companies. According to previous Bloomberg reports, SpaceX and Tesla, Inc. originally planned to announce the merger no later than the first half of 2027 and strive to complete the transaction before the end of U.S. President Trump's term. Currently, one of the key issues under discussion is how many shares SpaceX needs to issue to Tesla, Inc. shareholders to complete the transaction. The share exchange ratio will directly affect the ownership stakes and interest distribution of existing shareholders of both companies in the combined entity. Tesla, Inc. is scheduled to hold its annual shareholders meeting on December 3, which will also become an important time point for investors to watch. It is worth noting that SpaceX completed its landmark IPO in New York in June this year, making Musk the world's first person whose net worth exceeded US$1 trillion. If the merger is ultimately reached, it is not only expected to set a record for the size of a global M&A transaction, but will also further integrate Musk's two most valuable business empires, creating a massive technology group covering artificial intelligence, transportation, energy and space infrastructure.