Honda and Nissan Integration Talks

By Maki Shiraki and Norihiko Shirouzu
TOKYO (Reuters)

Honda and Nissan are expected to announce the initiation of business integration talks on Monday, as the automakers navigate a rapidly evolving industry. Two sources familiar with the matter reported that both companies are hosting board meetings today regarding these discussions. A joint press conference is planned, which will also include representatives from Mitsubishi Motors, Nissan's alliance partner.

Honda and Nissan plan to finalize their integration talks by June 2025. If successful, they aim to establish a joint holding company that will go public, with both Honda and Nissan transitioning to private ownership by August 2026, according to Japanese broadcaster TBS.

A merger involving these three automakers would create the world's third-largest automotive group by vehicle sales, following Toyota and Volkswagen. This move would mark the most significant industry restructuring since the formation of Stellantis in 2021.

Both Honda and Nissan have been exploring stronger partnerships, potentially including a merger, to tackle the competition posed by Tesla and Chinese manufacturers. Earlier this year, they expressed interest in cooperating on electrification and software development, leading to expanded collaboration with Mitsubishi Motors.

Last month, Nissan announced layoffs of 9,000 jobs and a 20% reduction in global production capacity due to declining sales in key markets such as China and the U.S. Meanwhile, Honda reported disappointing earnings linked to similar challenges in the Chinese market.

Currently, Honda's market capitalization exceeds $40 billion, while Nissan's is around $10 billion. Reports suggest that Honda could appoint the leadership team and most board members for the new holding company.

Discussions about integration may include Honda providing hybrid vehicles to Nissan and jointly utilizing Nissan's assembly facility in the UK. Additionally, Renault, Nissan's largest shareholder, is open to considering a deal and will evaluate the implications of such a merger.