Honda and Nissan announced plans to work toward a merger, while Mitsubishi has also joined the talks.
In the largest automotive industry shakeup since Stellantis’ formation in 2021, Japanese automakers Honda and Nissan officially laid out their plans to create one of the world’s largest automakers through a memorandum of understanding (MOU) Monday. Also confirming earlier reports on the matter, Mitsubishi has also agreed to join in the talks, unifying all three entities under a single holding company to pool development resources.
While the two companies’ boards resolved to merge Nissan and Honda together and executed the MOU Monday, they plan to spend the next six months defining exactly how the integration is going to happen — mainly, how shares are going to transfer from the two distinctive automakers (or three, if Mitsubishi does end up in the final entity) to a larger holding company. Under this deal, Honda and Nissan would be wholly-owned subsidiaries of the larger corporation, similarly to how Fiat Chrysler Automobiles and Groupe PSA became subsidiaries of Stellantis, as did the brands each automaker brought to the table.
The joint statement noted, “Nissan and Honda can aim to further contribute to the development of Japan’s industrial base as a “leading global mobility company” by integrating Nissan and Honda’s four-wheel-vehicle and motorcycle and power products businesses, enabling the brands of both companies to become more attractive and deliver more attractive and innovative products and services to customers worldwide.”
Opening the possibilities for new types of vehicles under both brands?
Effectively, this deal deepens the earlier strategic partnership which the two automakers established earlier this year. With that forward-looking statement, though, this deal could open the door for each respective brand to introduce its strengths to the other, as well as shore up each one’s weaknesses. At least, that’s the intent with such a merger.
It’s unclear for the moment exactly how that would play out, but we could see Honda’s integration advance the ball for Nissan’s hybrid vehicles, while Nissan and Honda both could work toward next-generation electric vehicles. The wide-ranging product line Honda manufactures from powersports vehicles to motorcycles and other equipment like power generators and lawn mowers may create some interesting prospects in terms of future development.
That is, and the statement acknowledges through such forward-looking statements, if the merger passes regulatory muster. Before the deal can actually come to fruition — which the automakers are targeting in August 2026 — it has to face applicable competition laws, particularly in Japan and with the U.S. Securities and Exchange Commission (SEC). After both individual automakers are delisted from the Tokyo Stock Exchange if the merger does go through, the current plan is to list the new holding company in August 2026.
Both automakers cite higher development costs and stiffer competition, especially in the EV space, as driving forces behind the merger. “Throughout the process,” the statement continues, “Nissan and Honda have engaged in discussions in consideration of various possibilities and options. At the same time, the business environment for both companies and the wider automotive industry has rapidly changed and the speed of technological innovation has continued to accelerate. The MOU between Nissan and Honda announced today is aimed to serve as an option to maintain global competitiveness and for the two companies to continue to deliver more attractive products and services to customers worldwide.”
The takeaway: Prepare to see more of this in the future.
Of course, this is far from the first time we’ve seen car companies merge into larger and larger organizations. It’s been happening for decades — with Stellantis being the most recent example, but even past deals like the DaimlerChrysler in 1998 or Chrysler’s own merger with American Motors Corporation (AMC) in 1990 (and AMC was the result of merging several car companies together in 1954…again, it’s hardly a new phenomenon).
If Honda, Nissan and Mitsubishi are ultimately able to merge in the coming 18 months or so, it could result in a company worth more than $50 billion, based on current market capitalization for each individual company. Such an enormous deal would still leave titans like Toyota on top, though the merged company would fall pretty closely to the value of Volkswagen Group or General Motors, putting it as the third or fourth-largest automaker on Earth.
Even with its gigantic reach and valuation, Toyota has also engaged in joint-ventures with smaller Japanese automakers like Subaru and Mazda. Though those are based around joint development for new technologies, Nissan and Honda’s merger could set a precedent for more mid-volume automakers to seek out merger deals for their own survival. Mitsubishi, for its part, has been party to several alliances over the decades, including with Chrysler Corporation and, more prominently in recent years, the Renault-Nissan-Mitsubishi alliance.
