Honda and Nissan enter merger talks, potentially forming third-largest global auto group
TOKYO – Honda (7267.T) and Nissan (7201.T) announced on Monday that they have begun discussions about a potential merger, which, if successful, would create the third-largest global automotive group, following Toyota and Volkswagen.
The current No. 3 group is South Korea’s Hyundai 005380.KS and Kia 000270.KS.
The integration would give the two companies scale and a chance to share resources in the face of intense competition from Tesla TSLA.O and more nimble Chinese rivals, such as BYD.
The merger of the two storied Japanese brands—Honda is Japan’s second-largest automaker, and Nissan its no. 3—would mark the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis STLAM.MI in a $52 billion deal.
Smaller Mitsubishi Motors 7211.T, in which Nissan is top shareholder, was also considering joining, the companies said. The chief executives of all three companies held a joint press conference in Tokyo.
“The rise of Chinese automakers and new players has changed the car industry quite a lot,” Honda CEO Toshihiro Mibe told the press conference, adding that they endeavour to “build up capabilities to fight with them by 2030.”
The two companies would aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen through the potential merger, they said.
They aimed to wrap up talks around June 2025 and then set up a holding company by August 2026, at which time both companies’ shares would be delisted.
Honda has a market capitalisation of more than $40 billion, while Nissan is valued at about $10 billion.
French automaker Renault RENA.PA, Nissan’s largest shareholder, is open in principle to a deal and would examine all the implications of a tie-up, sources have said.
Taiwan’s Foxconn 2317.TW, seeking to expand its nascent EV contract manufacturing business, approached Nissan about a bid, but the Japanese company rejected it, sources have told Reuters.
Foxconn decided to pause the approach after it sent a delegation to meet with Renault in France, Bloomberg News reported on Friday.
Shares in Honda ended the day up 3.8%, Nissan rose 1.6%, and Mitsubishi Motors gained 5.3% after the news reports on the details of the planned merger, while the benchmark Nikkei .N225 closed up 1.2%.
