Nissan and Honda, or Nissan Motor Co Ltd and Honda Motor Co Ltd, signed a memorandum of understanding (MoU) to start discussions and considerations of a merger, with an eye on establishing a joint holding company.

If realised, the merged entity will list its shares on the Tokyo Stock Exchange (TSE) for August 2026, becoming the third-largest carmaker in the world.

Merger conditions

The joint statement from the company stated that the MoU was signed to accelerate the ‘efforts toward achieving a carbon-neutral society and a zero-traffic fatality society.

It stated that if the business integration takes place, the resources of knowledge, human resources, and technologies to create ‘deeper synergies’, and to enhance the ability to respond the market changes – to improve mid to long-term corporate value.

“Additionally, Nissan and Honda can aim to further contribute to the development of Japan's industrial base as a “leading global mobility company” by integrating Nissan and Honda's four-wheel-vehicle and Honda's motorcycle and power products businesses,” said the joint statement.

Share transfer

As per the statement, the share transfer ratio will be decided at the time of signing the final definitive agreement of the merger.

The decision, the company stated, “will be based on the results of due diligence, third-party valuations with reference to the average closing prices of each company’s shares over a certain period prior to the announcement of the MOU”.

Merger expectations

These are the expectations of the firms from the merger if realised. 

1. Scale advantages by standardizing vehicle platforms

2. Enhancement of development capabilities and cost synergies through the integration of R&D functions

3. Optimizing manufacturing systems and facilities

4. Strengthening competitive advantages across the supply chain through the integration of purchasing functions

5. Realizing cost synergies through operational efficiency improvements

6. Acquisition of scale advantages through integration in sales finance functions

7. Establishment of a talent foundation for intelligence and electrification

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