Following our earlier report on the Honda Nissan merger talks, the Japanese automakers have officially commenced discussions post signing a three-party MoU (Memorandum of Understanding) along with Mitsubishi Motor. A joint press conference held by the companies on December 23, 2024 confirmed this news.
The key reason behind this move by these giant global automakers is the increased competition that they are facing from rising electric vehicle players in the global markets such as BYD from China and Tesla from the States. This has pushed them to take such a step in order to ensure survival.
A representative from Mitsubishi Motors said that the company had also signed the three-party MoU to begin discussion on its contingent involvement in this potential merger. He cited that Mitsubishi shall confirm its participation by the end of January 2025.
Honda and Nissan had, prior to this MoU, entered into an agreement to collaborate for developing EV platforms and components. Furthermore, they had started loosening their ties with their respective long-term partners — Nissan with Renault, and Honda with General Motors.
Honda seems to have the upper hand in this arrangement, with it expected to nominate the majority of the board members of the consequent holding company. The President and certain other top executives are also expected to be selected from the directors nominated by Honda. Also, Honda Motorcycles and its other businesses around power products and aviation are also to be a part of this potential merger.
The representatives stated that they expect to sign a definitive agreement by June 2025, and subsequently get registered at the Tokyo Stock Exchange by August 2026. Honda and Nissan are to be wholly owned subsidiaries of the holding company and will be delisted from the Stock Exchange. The share transfer ratio is yet to be determined.
In order to understand the situation in greater detail along with the possible implications of this potential merger on the Indian entities, read our article that can be accessed via the next slide →