Barclays Analyst Says Tesla and SpaceX May Announce Merger Before December 6
Barclays analyst Dan Levy pointed out that a merger between Tesla and SpaceX, both owned by Elon Musk, may be announced before Tesla's 2026 annual shareholder meeting, which must be held by December 6.
In a report to clients on October 14, the analyst noted that the possibility of a merger between Tesla and SpaceX has increasingly become a market consensus expectation. While there may be some financial synergies, the real value lies in the vertical integration of the AI technologies of both companies. The report mentioned that recent management comments indicate they see key benefits from the merger.
If SpaceX were to acquire Tesla (given that SpaceX's dual-class share structure is more likely), with current market values of approximately $2.1 trillion and $1.5 trillion, Musk would hold about 37% of the merged company's equity and about 56% of the voting rights. Each Tesla share is expected to receive about 0.7 SpaceX shares. The two companies have collaborated on batteries, manufacturing, and the Terafab AI chip factory.
Musk did not rule out a merger during Tesla's second-quarter earnings call, stating that overlaps are increasing, especially regarding Terafab. He further mentioned at the All-In Summit that the actions that could be taken under such close cooperation across many fields are unimaginable. SpaceX went public on NASDAQ in June under the ticker SPCX, after absorbing Musk's AI company xAI.
Major obstacles include shareholder approval, regulatory approvals in regions like China, and governance structure issues. About 11% of the votes at the 2025 shareholder meeting will be non-voting broker votes, effectively counted as opposition. Analysts expect that even if the announcement is later than October or early November, it could still occur within the next 6 to 12 months to complete the transaction during Trump's term.
Funding flows from the two independent entities to potential synergies in AI and manufacturing post-merger. Vertical integration concentrates resources in computing, robotics, and space data centers. The structure that strengthens Musk's control benefits the founder, while minority shareholders of Tesla and the regulatory approval process face pressure.
Source: Public Information
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Elon Musk did not rule out a merger between Tesla and SpaceX during the second-quarter earnings call and the All-In Summit, mentioning overlapping areas such as Terafab. SpaceX is expected to complete a $75 billion IPO in June 2026, after absorbing xAI. Barclays' report has raised the possibility of a merger to a market consensus expectation.
The report assumes that SpaceX would acquire Tesla through an all-stock transaction, allowing Musk to gain higher voting rights in the merged company. Resource mobilization is reflected in the integration of Tesla's physical AI (Robotaxi, Optimus) with SpaceX's virtual AI (Grok, etc.) and the joint Terafab project. The two companies have already collaborated on battery supply and manufacturing.
Similar cases of founders seeking integration after controlling multiple companies have appeared in other tech groups. Currently, both companies are in a phase of parallel expansion in AI infrastructure and physical applications, and the merger is seen as a path to accelerate vertical integration.
Essentially, this is about capital concentration. Through the structure of SpaceX acquiring Tesla, Musk's voting rights rise from dispersed holdings to majority control in the merged entity. The mechanism is that the dual-class share structure allows the acquirer to retain super voting rights while concentrating AI computing, chip manufacturing, and robotics resources into a single entity, changing the financing and governance landscape of the two companies.
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The value of vertical integration lies in the overlay of AI technologies, rather than purely financial synergies.
The dual-class share structure determines the direction of the acquisition, with voting rights concentrated post-merger.
Once market consensus expectations are formed, the timing of the announcement is constrained by the deadline for the shareholder meeting.