Japanese automakers Nissan and Honda on Monday announced they had entered into official talks to merge and create the world\u2019s third-largest automaker by sales. In a press conference on Monday, Honda CEO Toshihiro Mibe said the companies needed greater scale to compete in the development of new technologies in electric vehicles and intelligent driving. A business integration would give the companies an \u201cedge that will not be possible under the current collaboration framework,\u201d Mibe said, according to a translation. The deal would aim to share intelligence and resources and deliver economies of scale and synergies while protecting both brands, he said. A holding company would be formed as the parent company of both Honda and Nissan, listed on the Tokyo Stock Exchange. The larger Honda will nominate most of the integrated entity\u2019s board members. The merged group has the potential to deliver revenue of 30 trillion yen ($191.4 billion) and operating profit of over 3 trillion yen, he said. Mibe added that if approved, the integration would be a mid to long-term project that is currently not expected to show visible progress until 2030 and beyond. Nissan\u2019s strategic partner Mitsubishi has been offered the chance to join the new group and will take a decision by the end of January 2025. The companies are grappling with intense global competition in the EV market from the likes of Tesla and China\u2019s BYD. The proposed deal was first reported by Japan\u2019s Nikkei newspaper on Dec. 17. According to reports, Nissan shares spiked following the initial report of a merger. Analysts say the potential tie-up is a result of financial underperformance at the company and of the restructure of its longstanding partnership with France\u2019s Renault. In its most recent quarterly results, Nissan said it would cut 9,000 jobs and reduce global production capacity by a fifth. Honda CEO Mibe on Monday said some of the company\u2019s shareholders may feel that the deal would represent Honda supporting Nissan, but noted the merger was \u201cbased on the assumption that Nissan completes its turnaround action.\u201d \u201cIf Nissan and Honda fail to stand on their own feet the business integration talks will not come to fruition,\u201d he said. Nissan CEO Makoto Uchida told reporters that the discussion of integration did \u201cnot mean we have given up on a turnaround\u201d and was instead about ensuring the company\u2019s competitiveness for the future. \u201cAfter doing this turnaround action for future development, future growth, we need to look at ultimate size and growth. This growth will be through partnerships,\u201d he added.<\/p>\n","protected":false},"excerpt":{"rendered":"
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