Nissan, Honda Ink Deal To Form Joint Holding Company, Eye Tokyo Listing By 2026

Nissan Motor Co. and Honda Motor Co. have signed a memorandum of understanding to merge, aiming to form the world's third-largest automaker by sales. The two Japanese companies will start discussions and considerations for a business integration through the establishment of a joint holding company.

The newly established company will be listed on the Tokyo Stock Exchange's Prime Market in August 2026, according to a joint release.

Nissan and Honda plan to create the joint holding company through a share transfer, making it the parent of both firms. This will be subject to approval of shareholders of the two companies, as well as the regulatory authorities.

The share transfer ratio for the joint holding company will be determined by the time of concluding the final definitive agreement regarding the business integration, the release said.

The determination will be based on the results of due diligence, third-party valuations with reference to the average closing prices of each company's shares over a certain period prior to the announcement of the merger pact.

At the time of the effective date of the share transfer, "it is planned that Honda will nominate a majority of each of the internal and external directors of the joint holding company", the release stated.

"President and representative director or president and representative executive officer of the joint holding company will be selected from among the directors nominated by Honda," it added.

Other additional details of the joint holding company, including the company name, registered office, representatives, executive team, and organisational structure, will be finalised before the definitive agreement is executed.

Notably, Nissan and Honda had signed a deal on Mar. 15 regarding a strategic partnership in fields of vehicle intelligence and electrification. Since then, the two companies have held discussions aimed at collaboration in various fields.

The companies will establish an integration preparatory committee to facilitate a smooth transition and will conduct focused discussions. Based on the committee's discussions, as well as the results of due diligence, the companies will examine and analyse more specific synergies.

Following the merger, the combined sales revenue is expected to exceed 30 trillion yen and operating profit is expected to cross 3 trillion yen, as per the release.

The MoU between Nissan and Honda comes at a time when the global automobile industry is undergoing transformation, as it begins moving away from fossil fuel.