The two "ace" businesses under Elon Musk may officially announce their merger in early December.

Recently, speculation about the merger of Elon Musk's two "ace" assets — Tesla and SpaceX — has intensified. Dan Levy, an analyst at Barclays, even predicts that this historic "integration" will be realized before the end of this year.

Levy pointed out in the latest report that the merger proposal may be announced before Tesla's annual general meeting, which will be held no later than December 6. The window from late October to early November is also possible, but the difficulty of obtaining shareholder approval has increased.

He believes that the merger of Tesla and SpaceX will fully leverage the opportunities for vertical integration and accelerate the development of artificial intelligence.

"Although the industrial logic of the merger has long been questioned, we believe that the management's recent statements show that they have identified the key advantages of the merger. It is worth noting that while we expect the merger to bring some financial synergies, the real value lies in vertical integration," he wrote.

In recent months, speculation about the merger of the two companies has been rampant, especially after SpaceX's successful listing in June. The two companies have already established business partnerships, and SpaceX uses Tesla's battery energy storage system in its artificial intelligence data centers.

Tesla has integrated SpaceX's Grok AI assistant into its vehicles, and has also sold a number of vehicles to the rocket and artificial intelligence company. At the same time, the two companies are jointly building the Terafab project, a semiconductor manufacturing plant designed to produce artificial intelligence chips.

Levy believes that Terafab is the "key driving force" for the merger, because Musk firmly believes that this semiconductor manufacturing plant is critical to meeting the computing needs of Tesla/SpaceX. However, as a joint development model, this has created a "complex situation" that requires approval from the boards of directors of both companies.

Musk himself previously stated that Terafab is the largest overlapping area between the two sides. He called it a shared dependency and warned that without Terafab, Tesla's "ability to expand the production capacity of (humanoid robot) Optimus will be restricted".

In addition to Terafab, Levy also mentioned other overlaps between the two companies that support his view of a rapid merger: Tesla's robotaxis use xAI fleet management software; Tesla vehicles use Starlink for connectivity; SpaceX's space data centers may use Tesla's energy products; and Tesla's Optimus robots use Grok for natural language processing.

But perhaps the most convincing argument is Musk's desire to consolidate control. Levy pointed out that he wants to acquire 25% of Tesla's shares, which will give him sufficient "influence" at Tesla to pursue his artificial intelligence/robot ambitions.

At present, the most mainstream expected plan in the market is that SpaceX, as the acquirer, will acquire Tesla through an all-stock swap transaction. SpaceX is currently valued at about 2.1 trillion U.S. dollars, and Tesla at about 1.5 trillion U.S. dollars; the estimated share swap ratio is about 0.7 SpaceX shares for each Tesla share.

The choice of SpaceX as the acquisition entity stems from its differentiated voting right structure. Musk currently holds about 48% of SpaceX's equity and about 82% of the voting rights. Barclays estimates that after the completion of the merger, Musk will hold about 37% of the shares of the new merged company, control 56% of the voting rights, and maintain a majority of voting rights.

Although it is still uncertain when the two companies will merge, given Musk's recent statements, the possibility of a Tesla/SpaceX merger is becoming increasingly credible.

Musk said at Tesla's earnings call in July, "As you can see from our cooperation with SpaceX in many fields, there are more and more overlaps. We cannot talk about things like company mergers on earnings calls. All of these must go through proper procedures."

He also said at the "All-In Summit" last month, "With such extensive cooperation at so many levels, when there is such close cooperation in so many fields, who can imagine what actions might be taken?"

This article is from the WeChat official account "CLS", author: HUANG Junzhi, published with authorization from 36Kr.