Given their partnership with Nissan, Mitsubishi would be pulled into this deal too.
It’s no secret that Nissan has been riding on the struggle bus for a while. The automaker has faced financial adversities since the 1990s, with Renault continually offering a lifeline that ended earlier this year when Renault lessened its controlling stake in the Japanese brand.
For some time, mystery loomed on who could be Nissan’s saving grace as its new anchor investor. Now we know the answer could lie with Honda.
Honda announced that it has signed a Memorandum of Understanding (MOU) with Nissan, putting discussions of a merger in high gear. If both companies approve, they will become the third-largest automotive conglomerate in terms of sales volume.
“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future,” said Nissan Director, President, CEO, and Representative Executive Officer Makoto Uchida in a statement. “If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
Indeed, the two companies have already taken steps to grow their joint partnership this year, including an MOU signed in March to develop electric vehicles and safety technology and another in August to strengthen their commitment to in-vehicle software.
Renault relinquishing control of Nissan further opens the door to a greater joint venture with Honda beyond simply sharing parts.
“We are still at the stage of starting our review, and we have not decided on a business integration yet,” said Honda Director and Representative Executive Officer Toshihiro Mibe. “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 a chemical reaction that can only be driven through a synthesis of the two teams.”
Once they find a common direction, Honda and Nissan will draw up a definitive agreement to merge, including a plan to transfer shares, by June 2025. If that goes through, they will seek to get plans approved by April 2026, with the merger happening later that year.
