Nissan Honda Merger Kicks into High Gear!
okyo, Dec 23 (EFE).–
Nissan and Honda, two of Japan’s automotive titans, launched negotiations on Monday for a merger to form the world’s third-largest automaker by sales a combined annual revenue of more that 30 trillion yen ($190 billion) and operating profit of over 3 trillion yen.
The deal is expected to finalize by June 2025, with the holding company going public in August 2026.
In a joint press conference held in Tokyo, the two automkers said they intended to create the world’s third-largest car manufacturer by sales volume, only behind Japan’s Toyota Motor and Germany’s Volkswagen AG.
The companies signed a memorandum of understanding outlining the next steps after marking “a pivotal moment” having the potential to shape the future.
“If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone,” Nissan President and CEO Makoto Uchida said.
Mitsubishi’s Potential Role
Mitsubishi Motors, in which Nissan holds a 34 percent stake, is evaluating its role in the merger and will provide a response by the end of January, said its president, Takao Kato.
He expressed support for the discussions between Nissan and Honda.
Focus on Future Challenges Honda President Toshihiro Mibe highlighted the automotive industry’s challenging landscape, emphasizing the need to strengthen the value chain and incorporate technologies like electrification and smart vehicles.
“Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing.”
He said the two companies “with distinctive strengths” were still at the stage of starting a review and had not decided on a business integration yet.
“To find a direction for the possibility of business integration by the end of January 2025, we strive to be the one and only leading company that creates new mobility value through chemical reaction that can only be driven through synthesis of the two teams.”
Mibe projected that the merged entity could be a world-class mobility company with sales revenue exceeding 30 trillion yen (more than $190 billion) and operating profit of more than 3 trillion yen ($19 billion).
The Honda chief said the negotiatoin would be driven by the need to maintain global competitiveness in the face of a “drastically changing business environment.”
Mibe underscored the importance of integration to stay ahead of emerging players, particularly in regions like China, and expressed confidence that the merger would enable greater strategic freedom.
Strengthening Competitiveness
Nissan’s Uchida noted that starting discussions now will allow both companies to leverage their strengths and achieve greater competitiveness.
In March, Nissan disclosed preliminary talks with Honda to collaborate on electric vehicle (EV) component and software production, aiming to cut costs and boost competitiveness in the expanding EV market. Mitsubishi Motors joined the discussions in August, exploring the possibility of joining the alliance.
Strategic Motivations
The potential merger would leave Japan’s automotive industry divided into two major groups: the new Nissan-Honda alliance and Toyota Motor.
The discussions also come amid interest from Taiwanese electronics giant Hon Hai Precision Industry (Foxconn), which reportedly expressed interest in acquiring a stake in Nissan. The Yokohama-based automaker accelerated talks with Honda to counter Foxconn’s acquisition efforts, citing its expertise in EV development and manufacturing technology as key assets. EFE
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