A possible merger between Elon Musk’s rocket company SpaceX and carmaker Tesla may face bigger obstacles from politics than from regulation, drawing scrutiny in Beijing and potentially igniting a battle between U.S. President Donald Trump and the Democrats.
Musk revived speculation about a tie-up this week, calling a combination “a good idea” and confirming that committees at both companies were reviewing a potential deal, a step toward what could become the largest merger in history and create a company worth about $3.5 trillion.
But a merger would also unite one of the U.S. government’s most important aerospace and defense contractors with one of the most China-exposed major American manufacturers — a combination likely to raise questions about national security risks both in Washington and in Beijing.
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