by Maki Shiraki
TOKYO (Reuters) – Nissan and Honda announced on Monday the signing of a memorandum of understanding for a merger that would create the world’s third-largest automaker and mark a radical change in an industry in the midst of upheaval.
The two Japanese car manufacturers, who have said they want to conclude their negotiations around June 2025 and come together in a holding company by August 2026, are targeting a combined turnover of 30,000 billion yen (183.4 billion euros) and an operating profit of more than 3,000 billion yen.
Following the creation of the holding company, the shares of the two groups will be delisted, according to a source.
A merger between Nissan and Honda would create the third largest automobile group in the world in terms of vehicles sold, behind Toyota and Volkswagen.
“The rise of Chinese automakers and new players has significantly changed the automotive sector,” Honda CEO Toshihiro Mibe said at the two groups’ press conference.
“We must strengthen our capabilities to combat them by 2030, otherwise we will be defeated,” he added.
Traditional car manufacturers are indeed suffering from competition from players like Tesla and Chinese groups like BYD.
Honda, Japan’s second-largest automaker behind Toyota, has a market capitalization of around $40 billion, while Nissan, which ranks third, is valued at around $10 billion.
As part of the memorandum of understanding, Honda will appoint the majority of members of the board of directors of the future holding company.
CONSOLIDATION
A merger of the two historic Japanese brands would mark the largest consolidation in the sector since the 2021 merger between Fiat Chrysler Automobiles and PSA which gave birth to Stellantis in a $52 billion deal.
By integrating Mitsubishi Motors, Nissan’s partner, global sales of the new unit would increase to more than 8 million vehicles. The third largest automobile group in the world is currently the South Korean Hyundai and its affiliate Kia.
Renault, Nissan’s largest shareholder, told Reuters it was studying the implications of a merger between the two Japanese manufacturers.
“Discussions between Nissan and Honda are still at an early stage. As the main shareholder of Nissan, Renault Group will discuss with Nissan and consider all possible options in the best interest of Renault Group and its stakeholders,” the group said. to the diamond.
Before Nissan and Honda’s announcement, sources told Reuters that the two groups had planned to meet their boards of directors on Monday and then hold a joint press conference in which representatives of Mitsubishi Motors were also expected to take part.
During an online press conference from Lebanon where he is now a refugee, former Nissan CEO Carlos Ghosn was critical of the viability of a possible merger between Honda and Nissan, believing that this project “didn’t make sense.”
On the Tokyo Stock Exchange, Honda shares ended Monday with a gain of 3.82%, while Nissan shares advanced 1.58% and that of Mitsubishi Motors 5.25%, against an increase of 1. 19% for the Nikkei index.
In Paris, around 09:00 GMT, Renault shares fell by 0.66% with a drop of 0.20% for the CAC 40 index and a drop of 0.61% for the automobile sector in Europe.
(Reporting by Maki Shiraki; with contributions from Sakura Murakami and Dominique Patton in Paris; written by Kantaro Komiya; Claude Chendjou, edited by Augustin Turpin and Kate Entringer)
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