Investing.com-- Honda Motor Co Ltd (TYO:7267) and Nissan Motor Co., Ltd. (TYO:7201) are aiming to finalize the terms of a potential merger by June 2025, Japanese broadcaster NHK reported on Monday, amid a slew of reports that two are considering a combination.
Honda (NYSE:HMC) and Nissan (OTC:NSANY) have already signed a basic merger agreement, and will hold a press conference later on Monday to announce the deal, the NHK report said. The two will aim to finalize a deal by June 2025.
Mitsubishi Motors Corp. (TYO:7211)- in which Nissan is the biggest shareholder- will also announce its consideration for joining the merger.
Honda and Nissan plan to first establish a holding company under which the two will be merged. The deal could form the third-largest automobile maker in the world by sales.
Reports of the potential merger come as both Honda and Nissan grapple with dwindling overseas sales, especially in key automobile market China. Growing demand for electric vehicles in the country has especially eaten into Honda and Nissan’s market shares, as has an ongoing price war in the EV market between Tesla (NASDAQ:TSLA) and its Chinese rivals.
Softer demand for new vehicles in the U.S. and Europe also eroded sales in recent years.
Honda, Nissan and Mitsubishi shares rose between 1.3% and 3% after the report. Nissan's shares had rallied sharply last week after news of the potential merger first broke.