Honda Motor Company and Nissan Motor Company may merge. Both the car makers are looking to come together and compete in the global market with Toyota Motor Corporation.
Honda's executive vice president Shinji Oyama said that apart from the merger, both Honda and Nissan are also discussing several other options, including capital pooling and the formation of a holding company.
According to media reports, Mitsubishi Motors Corp may also be involved in the deal, as it already has capital ties with Nissan.
Nissan shares rose 24%, Honda fell 3%
After news of the Honda-Nissan merger, shares of Nissan rose 23.70% on Japan's Tokyo Stock Exchange (TYO). While Honda Motor shares fell by 3.04%.
The merger will create two large companies in Japan
With this deal, two major companies will operate in Japan's auto industry – first: a holding company controlled by Honda, Nissan and Mitsubishi, and second: a conglomerate consisting of Toyota Group companies.
Nissan has now cut ties with France's Renault SA. While Honda has withdrawn from General Motors Company. Before the deal was discussed between Honda and Nissan, earlier in the year the two companies agreed to work together on electric vehicle batteries and software.
According to a Nikkei report, the two carmakers are planning to sign a Memorandum of Understanding or MoU to discuss the equity stake they will share in the new holding company.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
