Honda and Nissan confirmed their intention to merge

The Japanese car manufacturers Honda and Nissan said on Monday that their goal is to reach a merger agreement by next June. The agreement is intended to be completed in 2026.

At this point, the companies are starting merger negotiations based on the letter of intent they signed. The economic newspaper reported about it The Financial Times (FT).

The merger of Honda and Nissan would be the largest merger in the history of the Japanese automotive industry. With the merger, they would also form the world’s third largest car manufacturer in terms of company sales.

FT:n according to the merger of the car brands, Mitsubishi Motors, with which Nissan has already been in an alliance, may join the third. Nissan also owns a small slice of the company.

The newspaper says that Mitsubishi has drawn up a separate letter of intent regarding the merger. The company aims to decide in January whether it will join Honda and Nissan’s negotiations.

According to FT, the market value of the company formed by Honda and Nissan would be 54 billion dollars based on the companies’ current valuations. If Mitsubishi joins the merger, the market value of the combined company would increase to 58 billion dollars.

According to FT, the market value of the company resulting from the merger would probably increase when investors reassess it. The valuation could still be lower than that of rival Toyota, which currently has a market value of $287 billion.

Honda’s and Nissan’s merger has been expected. The purpose of the merger would be to respond to the increased competition especially from Chinese car manufacturers.

At the press conference held in Tokyo on Monday, the CEO of Honda Toshihiro Mibe emphasized the need to maintain global competitiveness in a “strongly changing business environment”.