Tesla and SpaceX Talks Advance, With Deal Announcement Possible in December
Key Facts
Talks between Tesla and SpaceX over a deal combining the companies have advanced, with an announcement possible in December 2026, according to a Bloomberg report published on November 12, citing people familiar with the matter. The companies’ boards and advisers are discussing the deal terms and governance structure of the resulting entity, according to another report published the same day. The parties have not reached a final agreement, leaving the details and timing of the transaction unresolved. Discussions include how much SpaceX stock Tesla investors would receive in a potential deal. Negotiations also cover governance arrangements for the combined company, which would determine how the new entity is managed after any agreement is completed.
The potential deal is more than a combination of two companies: SpaceX’s market value exceeds $1.9 trillion, compared with about $1.5 trillion for Tesla, according to a November 12 report. The report valued the combined entity at more than $3.4 trillion, based on those figures. SpaceX went public in June 2026, according to the report. Those valuations put the stock swap and ownership distribution at the center of negotiations, alongside the management structure. The combined market value does not mean the parties have agreed on a valuation or the terms of the deal.
Tesla’s operations in China are among the issues the parties are discussing, with a November 12 report saying that isolating those operations or placing them in a separate scope is under consideration. That is tied to the sensitivity of SpaceX’s government and defense contracts, the same report said. The issue makes governance and legal structure part of the negotiations, alongside the number of shares Tesla investors would receive. The report gave no decision on separating the China operations or how they would be handled. It also remains unresolved whether the issue will affect the timing of an announcement or the terms of the deal.
The talks build on existing financial and commercial ties between the companies. Tesla disclosed that it invested $2.00 billion in SpaceX common stock in March 2026, representing a stake of less than 1%. Tesla also said it recorded $221 million in revenue from SpaceX’s purchase of Megapack products during the third quarter of 2026. SpaceX, meanwhile, recorded revenue of $14.6 billion in the third quarter, up 161% year over year, and net income of $4.4 billion, compared with a net loss of $1.1 billion in the same period of 2025. These figures provide context for the scale of the two businesses and their existing ties, without setting terms for a potential combination.
SpaceX’s quarterly results show differing sources of revenue and income within the company. Its superintelligence segment recorded revenue of $7,560 million in the third quarter of 2026, exceeding the connectivity segment’s revenue of $5,248 million. Still, operating income for the connectivity segment was $2,367 million, a figure highlighted in the segment data disclosed. The results come as the companies consider how to build and govern a unified entity. SpaceX’s board previously formed a special committee to evaluate a potential combination, while Tesla disclosed a committee of disinterested directors to study deepening the relationship, which could include a deal combining the companies.
But forming committees does not guarantee that a deal will be completed. SpaceX’s filing with the U.S. Securities and Exchange Commission says any potential combination requires approval from the special committee, the board and the controlling shareholder, and that there is no guarantee an agreement will be reached. Elon Musk said in October that treating a merger as certain was an exaggeration, and also said approval from 50% of all Tesla shareholders is required, not merely a majority of those voting. Those comments remain part of the backdrop to the approval terms, while no final agreement was announced in the November 12 report. Reuters reported on October 21 that analysts’ estimates of a potential premium for Tesla shareholders ranged from close to zero to 35%; those were earlier estimates, not agreed terms.
The timeline remains open between the possibility of an announcement in December and a delay to early 2027. A Reuters report said the announcement could be delayed until early next year, reflecting that the possible timing is not fixed. Tesla shares rose 16% over five sessions through November 12, according to a Benzinga summary. In October, SpaceX shares rose 7.5% in after-hours trading following the release of its quarterly results, according to the Associated Press. Despite their progress, the talks remain subject to completing negotiations over terms and governance and obtaining the necessary approvals before any final announcement.