Honda Motor (HMC) and Nissan Motor said Monday they have signed a memorandum of understanding to discuss the possibility of a merger and create a joint holding company.
The move follows earlier agreements between the two companies to collaborate on vehicle intelligence and electrification to advance towards a carbon-neutral and zero-traffic-fatality society.
The companies are aiming for combined sales of 30 trillion Japanese yen ($191.62 billion) and an operating profit of more than 3 trillion yen.
Based on the proposed schedule for the combination, the companies said they expect to execute a definitive agreement, which will include a share transfer plan, by June 2025.
The share transfer will likely be effective in August 2026. The share transfer ratio will be determined by the time of concluding the final definitive agreement regarding the merger, the companies said.
At the time of the effective date of the share transfer, Honda is set to nominate a majority of each of the directors of the joint holding company.
In a separate statement, Mitsubishi Motors has signed a memorandum of understanding to explore the possibility of its participation, involvement and synergy sharing about the business integration through establishing a joint holding company outlined in the memorandum signed between Nissan and Honda.
Shares of Honda rose more than 15% in recent premarket activity Monday.
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