Japanese automakers Honda and Nissan announced Monday that they are considering a merger to become more competitive in the changing automotive landscape.
The two companies will spend the next six months finalizing a deal that will create the world's third-largest automaker behind Toyota and Volkswagen.
The two companies also announced that they aim to establish a joint holding company to integrate their businesses and list the company on the Tokyo Stock Exchange by August 2026. statementIt also said Honda would control a majority of the company's board of directors.
“Today is a pivotal moment as we begin discussions about a business combination that could shape our future. We believe that by combining the strengths of both companies, we will continue to value our respective brands. We believe we can deliver unparalleled value to our customers around the world,” said Makoto Uchida, President and CEO of Nissan Motor Co., Ltd.
A third Japanese automaker, Mitsubishi Motors, will also participate in the talks.
Nissan has fallen into financial trouble, and last month announced plans to lay off 9,000 employees and cut global production capacity by 20%. Uchida, who announced the 50% pay cut, said at the time that Nissan had been too slow to adapt to changes in the auto industry, including consumer demand and rising costs.
rating agency Fitch Nissan's credit rating downgraded It rated it “negative,” citing competition with China and the fear that U.S. imports would be subject to tariffs if President-elect Trump takes office next month.
A deal could save the company and allow Nissan and Honda to combine forces to compete in the electric vehicle space.
The Associated Press contributed.
