Honda and Nissan Explore Merger

Investing.com — Honda Motor Co (NYSE:HMC) and Nissan Motor Co (OTC:NSANY) are considering a merger to strengthen their competitive position against rising Chinese auto manufacturers.

During a joint press briefing in Tokyo on Monday, the companies announced they are exploring this potential merger to consolidate resources. Alongside merger discussions, Honda revealed plans to repurchase up to ¥1.1 trillion ($7 billion) in shares.

A holding company is planned to oversee the new entity, with aspirations for a public listing by August 2026. Honda will appoint a majority of the new company’s board members.

Mitsubishi Motors Corp. (TYO:7211), in which Nissan holds a 24.5% stake, has also signed a memorandum of understanding, suggesting Mitsubishi's potential involvement with a decision expected by the end of January.

If successful, this merger would create one of the world’s largest automotive manufacturers, competing with Toyota Motor (NYSE:TM) in Japan and international rivals like BYD Co (SZ:002594) and Geely Automobile Holdings (OTC:GELYF) Ltd.

Toyota has stakes in several brands, including Subaru (OTC:FUJHY), Suzuki Motor Corp. (TYO:7269), and Mazda Motor Corp. (TYO:7261), forming a formidable alliance backed by its strong credit rating.

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