The automakers plan to create a joint holding company that will be the parent company of both. The discussions are expected to conclude by the end of January 2025 and Mitsubishi is also in talks for participation.
23 Dec 2024 | 4960 Views | By Kiran Murali & Ketan Thakkar
Japanese auto giants Honda Motor Co and Nissan Motor Corp today officially announced that they have started talks on a potential merger. The companies plan to create a joint holding company, which will own Honda and Nissan, making it the world’s third-largest automaker in terms of volume.
Both automakers ...
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Japanese auto giants Honda Motor Co and Nissan Motor Corp today officially announced that they have started talks on a potential merger. The companies plan to create a joint holding company, which will own Honda and Nissan, making it the world’s third-largest automaker in terms of volume.
Both automakers today signed an MOU to formally begin the merger talks. The companies will explore the possibility of participation and involvement in sharing with the business integration, with an aim to conclude the talks by the end of January 2025.
“Given the drastically changing business environment, Nissan and Honda have been holding discussions on ongoing joint projects. As a result of the series of dialogues, we discovered that the synergy from a business integration is greater than anticipated,” Honda Motor Director, President and Representative Executive Officer Toshihiro Mibe said.
Honda and Nissan will be wholly owned subsidiaries of the joint holding company with their respective brands to continue. The companies expect to sign a definitive agreement in June 2025. Once the definitive agreement is concluded, the holding company will be incorporated and listed on the Tokyo Stock Exchange in August, while the two subsidiaries will be delisted.
Mibe noted that the integration has the potential to create a combined entity that could generate annual revenue exceeding 30 trillion yen and an operating profit of over 3 trillion yen. The business integration discussions will explore synergies in R&D, vehicle platforms, and regional operations to enhance brand power and operational efficiency.
This merger could create a formidable competitor to Toyota in Japan, consolidating the automotive industry into two dominant factions and providing Nissan and Honda with greater strength to challenge larger rivals. This could also prove more beneficial for Nissan, which has been struggling with financial underperformance and is in the middle of restructuring. It recently announced 9,000 job cuts and a 20% cut in production amid weak sales.
“The integration discussions are not a sign of Nissan giving up on its turnaround efforts but rather a strategic move to strengthen competitiveness and future growth through synergies with Honda,” said Nissan Director, President and CEO Makoto Uchida.
This merger could create a formidable competitor to Toyota Motor Corp in Japan, consolidating the automotive industry into two dominant factions and providing Nissan and Honda with greater strength to challenge larger rivals.
Meanwhile, Nissan’s strategic partner Mitsubishi Motors Corp will also be involved in the talks to explore participation or involvement in the consideration of business integration. Honda, Nissan and Mitsubishi have also signed an MoU for Mitsubishi to explore participation, involvement, and synergy sharing in the joint holding company.
“In an era of change in the automotive industry, the study between Nissan and Honda about a business integration will accelerate synergy maximization effects, bringing high value also to the collaborative businesses with Mitsubishi Motors. In order to realize synergies and to make the best use of each company's strengths, we will also study the best form of cooperation,” Mitsubishi Director, President and CEO Takao Kato said.