Honda and Nissan start merger talks

Both companies signed a letter of intent to initiate merger talks. The two companies would therefore operate under a joint holding company.

The intention is to conclude the discussions in June next year, with the aim of establishing a new holding company in August 2026. Honda would be allowed to appoint the majority of the directors in the new holding company.

Honda and Nissan hope to create synergies and make more profits through the merger. Both companies would operate as subsidiaries under the holding company and retain their own brands.

A merger between the two would create the third largest automaker in the world. With a merger, Honda and Nissan – Japan’s second and third automaker after Toyota respectively – want to counter competition from American and Chinese electric car manufacturers.

Mitsubishi – of which Nissan is the major shareholder – may also join the joint holding company at a later stage. Mitsubishi would decide on this at the end of January. The three companies together account for 8 million vehicles rolling off the production line every year.

In November, Nissan announced that it would reduce its workforce by 9,000 employees and cut 20 percent of production capacity.