Honda Motor Co.'s stock surged 5.48% in pre-market trading on Monday, following reports that the Japanese automaker is exploring a potential merger with compatriot Nissan Motor Co. The consolidation is seen as a strategic move for the two companies to better compete against rivals like Tesla and Chinese EV makers in the critical electric vehicle market.
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, combining their global sales to over 8 million vehicles annually.
By joining forces, Honda and Nissan expect to leverage synergies and shared resources in areas like electric vehicle technology, software development for autonomous driving capabilities, and combining Honda's strength in hybrid vehicles with Nissan's EV platform. Nissan's alliance partner Mitsubishi Motors is also expected to be involved in the integration.
