Nissan chief executive Makoto Uchida, left, and Honda president Toshihiro Mibe at a news conference in Tokyo in March. The two Japanese automakers said they are in merger talks on Monday following weeks of speculation.鷺沢伊織/The Associated Press
Honda HNDAF and Nissan NSANY have begun talks that would see the Japanese onetime rivals become the world’s third-largest carmaker by sales, amid intense competition from Chinese and other foreign rivals.
After weeks of speculation, the two companies announced Monday they had signed a memorandum of understanding to form a joint holding company, in what could be the biggest domestic merger in Japan’s automotive industry.
While limited details were available, the proposed deal appears to amount to an effective takeover of Nissan by Honda, with the latter to appoint the prospective company’s new president and the majority of board members. Mitsubishi, which has an existing partnership with Nissan, is also involved in the talks. The carmakers said they aim to finish the details by June, with an eye to listing as a new joint holding company in August, 2026.
If the deal goes ahead, it would create the world’s third-largest auto group by vehicle sales after Toyota TOYOF and Volkswagen VWAGY. Nissan and Honda would aim for combined sales of 30-trillion yen (US$191-billion) and operating profit of more than 3-trillion yen through the potential merger, they said in a statement.
Honda, Japan’s second-biggest automaker after Toyota, has a market capitalization of more than US$40-billion, while third-ranked Nissan is valued at about US$10-billion.
Former Nissan Motor Co. and Renault CEO and Chairman Carlos Ghosn at a press conference on Dec. 23. Mr. Ghosn said he didn't see business logic in the potential partnership between the two car companies.Supplied
Former Nissan boss Carlos Ghosn – who rescued the Japanese company from near-bankruptcy in the 2000s after he took over Nissan as part of an alliance with French carmaker Renault – said he could see no business logic in a partnership between the two Japanese rivals.
“There is no complementarity, the two companies are Japanese companies, they are strong in the same fields, they are weak in the same fields,” Mr. Ghosn told an online press conference organized by the Foreign Correspondents’ Club of Japan. “For me it does not make sense. Maybe they can find synergies in the future, but from an industrial point of view there is duplication everywhere.”
The 70-year-old was speaking from Lebanon, where he has lived in exile since 2019, when he staged a dramatic escape from Japan while on bail for alleged financial misconduct.
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He suggested the motivation for the deal was political rather than business, based on a desire to keep Nissan in particular under Japanese control. Earlier this year, Taiwanese electronics giant Foxconn reportedly attempted to buy Nissan as part of a scheme to expand its nascent electric-vehicles business, but was rejected. Nissan did not respond to a request for comment about Mr. Ghosn’s statements.
Despite changes to Japanese mergers and acquisitions guidelines in 2023 intended to make foreign takeovers easier, companies in Japan remain hostile to overseas ownership. Seven & i Holdings Co., which owns the 7-Eleven chain of convenience stores, has strongly resisted an attempted takeover by Canada’s Alimentation Couche-Tard Inc.
Seven’s founding Ito family is reportedly preparing a bid worth around 9-trillion yen (US$58.7-billion) to take the company private rather than allow it to fall into foreign hands, even as Couche-Tard says it remains committed to finding a way forward.
With reports from Reuters