Historic Milestone: The World's Third-Largest Automaker on the Horizon!

12/25 2024 552

On December 23, Japanese automotive giants Honda and Nissan Motor announced the signing of a memorandum of understanding (MOU) to commence official merger negotiations. Through the establishment of a joint holding company, the two companies aim to integrate their operations, with a final agreement anticipated by June 2025 and a planned listing on the Tokyo Stock Exchange in August 2026. Following the listing, both Nissan and Honda intend to delist.

Under the terms of the MOU, Honda, being the larger entity, will nominate a majority of the board members for the new joint holding company. This merger is poised to create the world's third-largest automaker by sales volume, with projected revenues of 30 trillion yen and operating profits exceeding 3 trillion yen.

Furthermore, Nissan Motor and Honda have agreed to extend an invitation to Mitsubishi Motors to join this historic union. Mitsubishi Motors is expected to announce the outcome of its deliberations by the end of January 2025.

Image source: Honda's official website

"To navigate the profound environmental challenges confronting the automotive industry, we believe it is imperative to combine the extensive knowledge, human resources, technology, and other management resources amassed by Honda and Nissan over the years. Our objective is to emerge as a 'leading company creating new value in mobility.' We will continue our discussions to identify potential areas for operational integration by January 2025," stated Toshihiro Mibe, Honda's Director, Representative Executive Officer, and President.

As envisioned, post-integration, Honda and Nissan anticipate achieving synergies across multiple facets. This includes harmonizing vehicle platforms and R&D functions to enhance development efficiency and achieve cost synergies, optimizing business bases to promote factory interoperability, increasing factory utilization, significantly reducing fixed costs, and establishing a robust talent pool focused on intelligence and electrification.

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