Honda And Nissan Merger to Create World’s Third-Largest Automaker
London, 23 December 2024
As the industry experiences significant changes in its shift away from fossil fuels, Japanese automakers Honda and Nissan have announced plans to work towards a combination that would create the third-largest carmaker by sales in the world.
The two firms announced Monday that they had inked a memorandum of understanding and that Mitsubishi Motors Corp., a smaller member of the Nissan alliance, had also consented to participate in the integration negotiations.
As newcomers like China's BYD and EV market leader Tesla eat up market share, Japanese automakers are attempting to reduce expenses and make up for lost time after falling behind their major competitors in the electric vehicle space. Honda and Nissan will try to consolidate their activities under a joint holding company, according to Toshihiro Mibe, president of Honda. The new management will be led by Honda, who will uphold each company's values and brands. According to him, they want to finalise the deal and list the holding company on the Tokyo Stock Exchange by August 2026, with a formal merger agreement expected by June.
According to Mibe, the formal discussions are just getting started and no monetary value was provided. He stated that there are "points that need to be studied and discussed." "To be honest, there is a chance that this won't be implemented." Based on the market capitalisation of all three automakers, a combination might create a giant valued at over $50 billion. With their combined size, Honda, Nissan, and Mitsubishi would be able to take on Toyota Motor Corp. and Volkswagen AG of Germany. Toyota has technical alliances with Subaru Corp. and Mazda Motor Corp. of Japan. (Written and edited by The Decision Maker - Finance editors)
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