Nissan and Mitsubishi Shares Surge Amid Merger Talks
Shares of Nissan and Mitsubishi Motors rose sharply on Wednesday following media reports that Honda and Nissan were considering a three-way merger due to intensified competition from Chinese automakers and electric vehicles.
Market Reactions
Nissan Motor Co., Ltd. (TYO:7201) rallied up to 20% in Tokyo trading, reaching 417.6 yen. Mitsubishi Motors (OTC:MMTOF) Corp. (TYO:7211) surged as high as 474.7 yen. Conversely, Honda Motor Co Ltd (TYO:7267) (NYSE:HMC) saw a decline of about 2%, dropping to 1,240.0 yen.
Toyota Motor (NYSE:TM) (TYO:7203), potentially facing increased competition from a merger, rose by 1.8%. Meanwhile, Japan's benchmark Nikkei 225 index fell by 0.7%.
Merger Considerations
According to the Nikkei Asia daily, Nissan and Honda are exploring a merger and may involve Mitsubishi. The automakers are looking to consolidate to better navigate the competitive landscape.
Plans reportedly include establishing a holding company before determining merger terms and possibly incorporating Mitsubishi into the deal. Both companies have already intensified collaboration in recent years to combat competition from Chinese electric vehicle manufacturers and Tesla Inc (NASDAQ:TSLA).
Dwindling sales in China pose a significant challenge, as it is the world's largest automobile market. Furthermore, both Honda and Nissan face sluggish demand across the U.S. and European markets.
Official Statements
Both Honda and Nissan, recognized as Japan’s second and third-largest automakers, respectively, released identical statements indicating that no merger agreement has been reached, according to Reuters.
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