Nissan Motor President and CEO Makoto Uchida (L) and Honda Motor Director and Representative Executive Officer Toshihiro Mibe will hold a press conference on Monday to announce that the two auto giants are officially in discussions about a mega merger in which strategic partner Mitsubishi Mitsubishi has also been invited to participate to take. Photo by Franck Robichon/EPA-EFE
Dec. 23 (UPI) — Japan’s Honda and Nissan said Monday they had begun formal merger talks that would create the world’s third-largest automaker, with sales of as much as $191.4 billion and profits of more than $19 billion.
Announcing the negotiations, Toshihiro Mibe, CEO of the larger Honda, told a news conference in Tokyo that the merger would provide “greater scale” to advance the electric vehicle technology and software integration needed to compete in the global car market.
Mibe said the collaboration, which also includes Nissan’s strategic partner Mitsubishi, would provide “an advantage that will not be possible under the current cooperation framework” to take advantage of a once-in-a-century revolution in the sector. .
Mitsubishi was expected to make a decision by the end of January, Honda said in a press release.
“At this time of change in the automotive industry, which is said to occur once in a century, we hope that Mitsubishi Motors’ participation in Nissan and Honda’s business integration discussions will lead to further social change, and that we will be able to become a leading company in creating new value in mobility through business integration,” said Mibe.
“Nissan and Honda will begin discussions from today with the aim of clarifying the possibility of business integration around the end of January, in line with Mitsubishi Motors’ consideration.”
Mibe, who said the companies aim to reach an agreement by June and establish a parent company the following month that would be listed on the Tokyo Stock Exchange, stressed that the marriage was an undertaking with a medium to long term. it was expected that this would not yield measurable profits until 2030 at the earliest.
He insisted Honda will not save Nissan, the world’s ninth-largest carmaker, which is facing “a serious situation” after first-half profits fell more than 93% to just $122.4 million, leading to the company had to reduce capacity by a fifth and lay off staff. 9,000 employees.
The deal, Mibe said, was “based on the assumption that Nissan completes its turnaround action.”
“If Nissan and Honda fail to stand on their own two feet, business integration talks will not yield results,” he said.
Nissan CEO Makoto Uchida said the consolidation talks should not be interpreted as the company “giving up a turnaround,” but as a way to secure future competitiveness through “significant synergies in a wide range of areas.”
“After carrying out this turnaround action for future development and future growth, we need to look at the ultimate size and growth. This growth will be through partnerships,” he added.
“Significantly, Nissan’s partner, Mitsubishi Motors, is also involved in these discussions. We expect that as this integration comes to fruition, we will be able to deliver even more value to a broader customer base.”
Nissan, which was acquired by France’s Renault in 2000, restructured their partnership in a major shake-up in 2023, significantly reducing Renault’s controlling stake in Nissan.
Renault divested nearly 30% of its stake in Nissan in an effort to reconfigure the coalition’s shareholdings amid a changing global economic landscape battered by inflation and weak consumer demand.
