SpaceX and Tesla Discuss Merger Valued Above $3.4 Trillion

SpaceX and Tesla are discussing a merger that could put their combined valuation above $3.4 trillion, bringing Elon Musk's space and electric-vehicle businesses under one corporate structure.

The companies' boards and advisers are working through transaction terms and the structure of a combined company. A central issue is the exchange ratio: how many SpaceX shares Tesla shareholders would receive. The talks also cover governance, and an announcement could come as soon as December.

SpaceX is valued above $1.9 trillion after a June initial public offering, while Tesla's market value is about $1.5 trillion. The exchange ratio would determine how ownership in the combined company is divided between the two investor groups.

The businesses span electric vehicles and battery storage, rocket launches and satellite communications. The firms are also developing Terafab, a semiconductor plant in Texas, and plan to share AI research on space infrastructure, autonomous driving and humanoid robots.