Nissan, Honda sign MoU to explore merger, eye annual revenue of 30 trillion yen

Japanese auto giants Nissan Motor Co. Ltd. and Honda Motor Co. Ltd. have signed a memorandum of understanding (MoU) to explore a potential business integration through the creation of a joint holding company, the two companies announced Monday.

The proposed integration aims to bolster global competitiveness by combining their management resources, including knowledge, technologies, and human capital, to generate synergies and adapt to rapidly changing market dynamics. The MoU builds on discussions initiated earlier this year, following a strategic partnership agreement in March to collaborate on software-defined vehicles (SDVs) and other cutting-edge technologies.

Through the merger, the companies plan to achieve a combined annual revenue of over 30 trillion yen and operating profit exceeding 3 trillion yen.

Nissan CEO Makoto Uchida described the agreement as a pivotal moment, saying, “ If realised, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands.”

Honda Director and Representative Executive Officer Toshihiro Mibe said: “We are still at the stage of starting our review, and we have not decided on a business integration yet, but in order to find a direction for the possibility of business integration by the end of January 2025, we strive to be the one and only leading company that creates new mobility value through chemical reaction that can only be driven through synthesis of the two teams."

The merger would involve the formation of a joint holding company via a share transfer, making Honda and Nissan its wholly-owned subsidiaries. Subject to shareholder and regulatory approvals, the new entity is expected to list on the Tokyo Stock Exchange's Prime Market by August 2026.

Both Nissan and Honda will delist upon the joint holding company's listing, although shareholders will retain the ability to trade the new company’s shares.

A definitive agreement is expected by June 2025, with shareholder approval targeted by April 2026. The share transfer will become effective in August 2026. Honda will nominate a majority of directors for the joint holding company, with further details on governance to be finalised by the integration preparatory committee.

The share transfer ratio will be determined based on due diligence and third-party valuations prior to the agreement.