The steady drip of Tesla (TSLA) and SpaceX (SPCX) merger talk is increasing, and this time it’s coming from a Wall Street bank.
In a note to clients on Wednesday, Barclays analyst Dan Levy said a tie-up “has increasingly become the consensus expectation.” He pointed to media reports and to Elon Musk’s own public hints. For now, though, it’s still speculation.
Tesla and SpaceX stock were both lower in Thursday’s trade, along with the broader tech sector.
146.74 -5.42 (-3.56%)
As of 1:19:00 PM EDT. Market Open.
SPCX TSLA
Timing was the most notable part of Levy’s note. Tesla must hold its annual general meeting [AGM] by Dec. 6, per SEC rules, and Levy and Barclays believe that this would be the appropriate avenue for shareholders to vote on a proposal.
Levy said a merger announcement that slips later into October or early November “may increasingly challenge merger approval as part of the AGM.” In that case, a deal wouldn’t be dead, but may come instead in the next six to 12 months, since investors see an advantage in closing any deal under the Trump administration’s friendly M&A environment.
Levy argues AI vertical integration would be a key component of the merger. Tesla’s physical AI, such as Robotaxi and Optimus, would be paired with SpaceX’s virtual AI, such as Grok, all supplied by the companies’ planned Terafab chip plant. Right now, Terafab decisions need approval from both boards, a process Tesla and SpaceX CEO Elon Musk has said would take “a while.”
Musk’s shareholding in the two companies illustrates how a merger would unfold.
Musk owns around 20% of Tesla, compared with about 48% of SpaceX. SpaceX super-voting Class B shares give him around 82% of the vote. SpaceX is worth about $2.1 trillion and Tesla about $1.5 trillion.
If SpaceX bought Tesla at those values, Musk would own about 37% of the combined company and control 56% of the vote, Levy said. That’s well above the 25% Tesla stake he has long said he wants.
That’s why Barclays expects SpaceX to be the buyer in an all-stock deal. At current values, each Tesla share would be worth about 0.7 SpaceX shares before any takeover premium.
But the biggest factor weighing in favor of a merger happening is that Musk himself has heavily hinted at a tie-up of his two biggest companies.
On Tesla’s latest earnings call, Musk noted that there’s “more and more overlap” between his two companies, whether it’s operations, technology, or even SpaceX buying Tesla Cybertrucks. There are also Musk’s own remarks at the All-In Summit last month.
“With all this collaboration, on so many levels, who can imagine what action one might take when there’s so much close collaboration in so many areas,” he said.
