Honda Motor Co.'s stock surged 9.67% on Monday in pre-market trading, following reports that the Japanese automaker is exploring a potential merger with compatriot Nissan Motor Co.
According to multiple media sources, Honda and Nissan are expected to announce the start of business integration talks, with aims to finalize a deal by June 2025. If successful, the merger would create the world's third-largest automaker by vehicle sales after Toyota and Volkswagen.
The consolidation is seen as a strategic move for the two companies to better compete against rivals like Tesla and Chinese EV makers that have gained significant market share, especially in the critical Chinese market. By joining forces, Honda and Nissan expect to leverage synergies and shared resources in areas like:
- Electric vehicle technology, where Nissan has expertise from its pioneering Leaf EV
- Software development for autonomous driving capabilities
- Combining Honda's strength in hybrid vehicles with Nissan's EV platform
Under the proposed structure, Honda and Nissan would establish a joint holding company in 2026, with Honda likely appointing the majority of board members and leadership. Nissan's alliance partner Mitsubishi Motors is also expected to be involved in the integration.
While operational and regulatory hurdles remain, the potential merger highlights the growing pressure on legacy automakers to consolidate and achieve scale amid the industry's transformative shift towards electrification and connected mobility solutions.
