Recently, Honda and Nissan announced that they have agreed to begin discussions and consider business integration, having signed a memorandum of understanding (MOU) regarding the merger at their respective board meetings. The MOU has been officially executed. The goal is to reach an agreement by June next year and complete the transaction by August.
According to the announcement, Honda and Nissan plan to establish a joint holding company through a share transfer, which will become the parent company of both firms.
Under the current plan, Honda will lead the new company's management. The announcement states that, effective from the date the share transfer is completed, Honda will nominate the majority of both internal and external board members for the joint holding company. The president and representative director, or CEO, of the joint holding company will be selected from the directors nominated by Honda.
The announcement also emphasized that both companies plan to continue coexisting and equally developing their respective brands.
The two companies aim to become a world-class mobility company with annual sales revenue exceeding 30 trillion yen and operating profit over 3 trillion yen through the synergistic effects generated by the business integration.
The newly formed joint holding company plans to go public on the Tokyo Stock Exchange in August 2026. Before that, Honda and Nissan will delist from the Tokyo Stock Exchange between late July and August 2026.
Additionally, Honda and Nissan have signed a memorandum of understanding with Mitsubishi Motors today to explore the possibility of Mitsubishi joining the integration.
If the merger of the three companies goes smoothly, it will become the largest global automotive industry merger since the formation of Stellantis in 2021 through the merger of FCA and PSA. Based on their combined annual sales of over 8 million vehicles last year, the new group would become the third-largest global automotive company, following Toyota and Volkswagen.
According to the Associated Press, Honda's president, Toshihiro Mibe, stated in an interview that formal negotiations are just beginning, and "some issues still need to be studied and discussed." He also said, "Frankly, it is possible that this plan will not be implemented."
The announcement also mentioned that the establishment of the joint holding company will require approval and will be based on the business integration, with Nissan's steady progress in turning around its losses as a prerequisite.
Seven "Potential Synergies"
With the merger plans now public, the focus is on whether the two companies can achieve a 1+1 > 2 effect.
Recently, former Nissan CEO Carlos Ghosn commented on the merger between Nissan and Honda in an interview with foreign media, calling it a "gamble."
Ghosn pointed out that the merger between Honda and Nissan is not a pragmatic deal, as the two companies lack complementarity in terms of products, brands, and market strategies, making it difficult to find synergies.
At a press conference on December 23, Ghosn reiterated that complementarity is essential for a successful merger, but there is no such complementarity between Honda and Nissan. He added, "If this merger happens... I personally think it will not succeed."
According to the announcement, at the current stage, the expected potential synergies from the integration of the two companies include:
1：Achieving Scale Advantages Through Standardized Vehicle Platforms: This includes accelerating the global complementarity of products, including ICE (Internal Combustion Engine), HEV (Hybrid Electric Vehicle), PHEV (Plug-in Hybrid Electric Vehicle), and EV (Electric Vehicle) models.
2：Improving Development Capacity and Cost Synergies through R&D Integration: After the integration, the two companies will engage in more integrated collaboration across all R&D departments, including basic research and vehicle application technology research.
3：Optimizing Manufacturing Systems and Facilities: This involves sharing production lines to reduce fixed costs.
4：Integrating Procurement Systems to Strengthen Supply Chain Competitiveness: The companies will improve and streamline procurement processes and will collaborate with the same supply chain and commercial partners to obtain common parts.
5：Achieving Cost Synergies by Improving Operational Efficiency: The two companies aim to significantly reduce costs through integration of systems and back-end operations, as well as by upgrading and standardizing operational processes.
6：Integrating Financial Services in Sales and Increasing Operational Scale: The goal is to provide a range of mobility solutions, including new financial services throughout the lifecycle of vehicles for both companies' customers.
7：Establishing an Intelligent and Electrification Talent Foundation to Increase Employee Exchange and Technological Collaboration.
