Honda and Nissan plan to merge as we enter the age of electric cars

Honda and Nissan announced plans to merge as the Japanese automakers grapple with competition from rival brands in the electric vehicle market. The companies confirmed on Monday They signed a memorandum of understanding that will create the third-largest automaker by sales, behind Toyota and Volkswagen.

Nissan alliance member Mitsubishi Motors is also in talks Honda and Nissan are also joining the integration, with a decision expected by the end of January. Based on the market capitalization of the three companies, the eventual merger could create an entity worth more than $50 billion. Honda President Mibe Toshihiro Mibe said Honda will initially lead the management of the combined company and aims to finalize a formal merger agreement by June and close the deal by August 2026.

“Creating new mobility value by integrating resources such as the knowledge, talent and technology developed by Honda and Nissan over the years is critical to overcoming the challenging environmental changes facing the automotive industry,” Mibe said in a statement.

this The proposed merger was first mooted last weekaiming to establish a joint holding company to cope with increasing global competition in the electric vehicle market from brands such as Tesla and China’s BYD. The deal would also help rescue struggling Nissan Motor Co., which announced plans in November after its net profit fell more than 90% year-on-year in mid-2024. lay off thousands of workers.

“If this comes to fruition, I believe that by combining the strengths of both companies, we can provide unparalleled value to customers around the world who appreciate our respective brands,” said Nissan Chief Executive Makoto Uchida. “Together we can create a Let them enjoy their cars in a unique way that no one company can achieve alone.”

former nissan boss Carlos Ghosn told Bloomberg On Friday, it said the merger was a “desperate move” by Nissan and “not a pragmatic deal because, frankly, it’s hard to find synergies between the two companies.” The company has been in turmoil since Ghosn was arrested by Japanese authorities in 2018 for financial misconduct.