Honda and Nissan, two of Japan’s leading automakers, announced on December 23 that they have signed a basic agreement to consider integration, according to MoneyControl. The merger, if finalized, would reshape the global automotive industry, with plans to establish a holding company in August 2026 and conclude merger talks by June 2025.
Key highlights of the proposed merger:
- Timeline:
- Talks to be concluded by June 2025.
- Both companies’ shares to be delisted between July and August 2026.
- The holding company expected to be listed in August 2026.
- Market Valuation:
- Honda’s market capitalization exceeds $40 billion, while Nissan is valued at approximately $10 billion.
- Sales and Profit Targets:
- Combined sales of 30 trillion yen ($191 billion).
- Operating profit of more than 3 trillion yen.
- Management:
- Honda will appoint the majority of the holding company’s board.
Strategic context:
The merger would represent one of the largest industry reshuffles since Fiat Chrysler and PSA Group’s $52 billion merger to form Stellantis in 2021. Honda and Nissan aim to leverage their combined resources to regain competitiveness in key markets like China and the US, where both companies have faced declining sales.
Challenges in the global market:
- Nissan recently announced a 20% reduction in global production capacity and plans to cut 9,000 jobs following a drop in sales in China and the US.
- Honda, too, reported weaker-than-expected earnings, attributing the decline to increasing competition from local Chinese automakers such as BYD, which dominate the electric and hybrid vehicle segments.
With the merger, Honda and Nissan hope to solidify their positions in the global auto industry and achieve sustainable growth in the evolving electric vehicle market.
