Nissan and Honda announced today that they signed a deal to start merger discussions and considerations toward business integration between the two companies through the establishment of a joint holding company. The two companies and Mitsubishi Motors Corporation also signed a deal to explore the possibility of Mitsubishi Motors’ participation in the merger.
This comes as both companies face major challenges. Nissan is experiencing significant financial challenges due to rising competition from Chinese competitors in the electric and hybrid vehicle business. The company’s plummeting sales in the U.S. and China have forced it to cut jobs and production capacity and lower its annual profit outlook by 70 percent.
Following the announcement, Nissan’s shares gained 1.58 percent while Honda’s shares surged 3.82 percent.
Partnership in vehicle electrification
To accelerate their efforts in meeting the global demand for electrical vehicles, Nissan and Honda signed a memorandum of understanding (MOU) on March 15 regarding a strategic partnership for the era of vehicle intelligence and electrification. Since then, the two companies have held discussions aimed at collaboration in various fields.
On August 1, the two companies also signed a second deal to deepen the framework of their strategic partnership.
“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our 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,” stated Makoto Uchida, Nissan director, president, CEO and representative executive officer.
Maintaining global competitiveness
In their latest statement, Nissan and Honda announced that they had agreed to carry out joint research in fundamental technologies in the area of platforms for next-generation software-defined vehicles (SDVs), particularly in the areas crucial for intelligence and electrification, to advance focused discussions toward more concrete collaboration.
Throughout the process, Nissan and Honda have engaged in discussions in consideration of various possibilities and options. At the same time, the business environment for both companies and the wider automotive industry has rapidly changed and the speed of technological innovation has continued to accelerate.
Therefore, the deal announced today aims to serve as an option to maintain global competitiveness. It will also allow the two companies to continue to deliver more attractive products and services to customers worldwide.
“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,” stated Toshihiro Mibe, Honda director and representative executive officer.
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Merger to take place in June 2025
Nissan and Honda announced that they will establish an integration preparatory committee to facilitate a smooth integration and will conduct focused discussions. The two companies, with the result of the consideration, plan to establish, through a joint share transfer, a joint holding company that will be the parent company of both companies. Both Nissan and Honda will be fully owned subsidiaries of the joint holding company.
The two companies expect the execution of a definitive agreement concerning the merger to take place in June 2025.
If the merger happens, Nissan and Honda will integrate their respective management resources such as knowledge, human resources, and technologies. The companies will also create deeper synergies, enhance the ability to respond to market changes and expect to improve mid- to long-term corporate value.
Additionally, Nissan and Honda can aim to further contribute to the development of Japan’s industrial base as a “leading global mobility company” by integrating Nissan and Honda’s four-wheel-vehicle and Honda’s motorcycle and power products businesses, enabling the brands of both companies to become more attractive and to deliver more attractive and innovative products and services to customers worldwide.
“Honda and Nissan are two companies with distinctive strengths. We are still at the stage of starting our review, and we have not decided on a business integration yet, but in order 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 a chemical reaction that can only be driven through the synthesis of the two teams,” added Mibe.
