Musk's $3.6 trillion Tesla-SpaceX merger faces shareholder and regulatory hurdles

Elon Musk announced a proposed merger between Tesla and SpaceX, a deal that would create a combined company valued at approximately US$3.6 trillion, making it one of the world's five most valuable firms. Musk acknowledged his conflict of interest as a key shareholder and executive at both companies. The combined entity would employ over 155,000 people and generate US$153 billion in annual revenue, but analysts expect negative free cash flow of at least US$54 billion due to heavy spending on AI infrastructure and rockets. The deal faces significant hurdles, including shareholder approval and regulatory scrutiny in the US, EU, UK, and China. Musk's control would tighten, as he holds about 84% of SpaceX votes versus 20% at Tesla. China, where Tesla earns 22% of its revenue, poses a particular challenge due to national security concerns over SpaceX's defense work, potentially requiring a ringfenced structure for its Chinese operations.