Branson founded Virgin Galactic in 2004 to cash in on burgeoning demand for satellite launch services and, eventually, space travel, a market long dominated by industry stalwarts such as United Launch Alliance - a partnership between Boeing Co and Lockheed Martin Corp.
Chamath Palihapitiya, SCH's founder, hailed Branson as "a once-in-a-generation visionary" and said Virgin Galactic is "light years ahead of the competition".
"Great progress in our test flight program means that we are on track for our attractive spaceship to begin commercial service", Branson said in a statement.
Social Capital Hedosophia will have a 49 per cent stake in the combined business, according to a statement Tuesday.
"As we look back on the decade of Apollo with wonder and gratitude, I believe we can do so with the excitement that comes from knowing we are at the dawn of a new space age".
The Journal said talks between Palihapitiya and Branson began after he walked away from negotiations with Saudi Arabia in the wake of the assassination of Washington Post journalist Jamal Khashoggi.
Branson is one of several billionaires, including Amazon.com Inc.
The founder of Virgin Atlantic Airways and businesses spanning banking to gyms said in May that Virgin Galactic's development and testing program had advanced sufficiently to move its space vehicles and 100 staff to its Spaceport America operational base in New Mexico from a California test center.
Bezos has also spent years working on its space tourism plans, and Blue Origin is expected to compete directly with Virgin Galactic in that business.
The company said it would reposition its carrier aircraft, VMS Eve, and spaceship VSS Unity once cabin interiors and other work had been completed by manufacturer The Spaceship Company.
In February, the company took a step closer to its goal of suborbital flights for space tourists when its rocket plane soared to the edge of space with a test passenger for the first time.