Japanese automakers Honda and Nissan have announced plans to merge, forming the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels. The two companies signed a memorandum of understanding on Monday, with Mitsubishi Motors also joining talks on integrating their businesses.
Honda will lead the new management under a joint holding company, with the aim to have a formal merger agreement by June and complete the deal by August 2026. The combined entity is expected to be worth over $50 billion based on market capitalization, allowing it to compete with Toyota Motor Corp. and Volkswagen AG.
A merger could help Nissan recover from its financial woes, which include a quarterly loss of 9.3 billion yen ($61 million) and a downgraded credit outlook by Fitch Ratings due to worsening profitability. Honda’s shares surged 3.8% after the announcement, while Nissan’s Tokyo-traded shares gained 1.6%.
The move reflects an industry-wide trend toward consolidation as automakers adapt to changes in electrification and autonomous driving technologies. The combined entity will pursue unifying operations, sharing components for electric vehicles like batteries and jointly researching software for autonomous driving.
Honda President Toshihiro Mibe acknowledged that there are “points that need to be studied and discussed,” but expressed confidence that the merger could deliver greater value to customers. Nissan’s CEO Makoto Uchida also stated that the company is committed to becoming more efficient and responsive to market changes.
Source: https://apnews.com/article/japan-nissan-honda-evs-foxconn-782913451d6487ed177a3517a9ba5be5