Musk is pushing forward a combination of SpaceX and Tesla, with an announcement possible as early as December, according to reports. If it completes it would be the largest merger on record.
Tesla holds its annual shareholder meeting on 3 December. The three directors standing for re-election are the same people whose approval the transaction would require. Boards and advisers on both sides are reported to be in negotiations over price and control, with December as the target window and early 2027 as the fallback.
The arithmetic
SpaceX listed in June and has traded above a 1.9 trillion US dollar market value since. Tesla is worth about 1.5 trillion. Combined, the entity would be valued above 3.45 trillion dollars, or roughly RMB 23.07 trillion.
The comparison is not close. The largest single acquisition to date was Vodafone’s 183 billion dollar purchase of Mannesmann in 2000. SpaceX’s acquisition of xAI earlier this year, at about 250 billion dollars, would be dwarfed by this one.
Musk has combined his companies before. SolarCity, Twitter and X, and Tesla’s 2 billion dollar investment in xAI converted into SpaceX stock are all precedents, each above a billion dollars. In May he first raised the idea of merging the two companies weeks before the SpaceX listing, and Tesla’s October proxy statement already carried signs of preparation.
Ira Ehrenpreis, who chairs Tesla’s compensation and governance committee, has sat on the SpaceX board since February. The 3 December ballot is limited to re-electing Musk, chair Robyn Denholm and JB Straubel to terms running to 2029, plus a compensation vote and an auditor ratification.
Who ends up holding what
The direction is settled: SpaceX absorbs Tesla rather than the other way around. The open variable is how much SpaceX stock Tesla investors receive.
The valuation structure points the same way. SpaceX is worth more than Tesla, and Musk controls roughly 85 per cent of SpaceX’s votes through super-voting shares against a stake of about 20 per cent in Tesla.
Put plainly, Tesla shareholders would exchange one share one vote for a stake in a company whose control is already locked, held by the same person who controls both sides of the negotiation.
That is the part of the deal the market will have to price. The combined entity would carry the launch and satellite business, the orbital data centre ambitions, the electric vehicle business and the humanoid robot programme under a single controlling shareholder, with minority holders of the smaller half holding no meaningful vote over how any of it is run.
Editor’s note: This is an adapted translation of the original Sohu Tech report. It has been trimmed and restructured for readability for an international business audience. The full original (in Chinese) is at https://www.sohu.com/a/1100927388_258768.