Tesla and SpaceX could announce merger as early as December

Tesla and SpaceX have made progress in merger talks and could announce a deal as early as December, Bloomberg reported, citing people familiar with the matter.

According to Bloomberg, the companies are also discussing a scenario in which the announcement is pushed back to early 2027. The news outlet previously reported that a deal was expected to be announced in the first half of next year.

The companies' boards and advisers are working out the merger terms and the governance structure of the combined company. One unresolved question is how many SpaceX shares Tesla shareholders would receive.

SpaceX is valued at approximately $1.9 trillion following its June IPO, while Tesla has a market capitalization of around $1.55 trillion. According to Bloomberg, the combination could become the largest corporate deal in history. Following the report, Tesla shares rose as much as 1.9% to $398.35, while SpaceX shares gained 0.6% to $140.63.

SpaceX is a major U.S. defense contractor, while Tesla has substantial manufacturing operations in China. Bloomberg reported that the companies still need to determine how to separate Tesla's Chinese operations from SpaceX's defense contracts.

During SpaceX's October 20 earnings call, Elon Musk called a potential merger "a good idea" and said both companies had formed special committees of independent directors. The deal would require approval from holders of at least 50% of Tesla's outstanding shares.

The companies already collaborate on projects, including the Terafab chip manufacturing facility in Texas.