Honda Motor Co. and Nissan Motor Co. announced plans to combine in a merger that would create a Japanese auto giant with projected sales of more than ¥30 trillion ($210 billion), mounting a direct challenge to global industry leaders like Toyota Motor Corp.
The Tokyo-based automakers will form a joint holding company in August 2026 through a share transfer, with Honda taking the lead role by nominating the majority of directors and the president, according to a joint statement Monday. The combined entity aims to generate operating profit exceeding ¥3 trillion ($21 billion).
The deal marks one of the largest-ever reorganizations in Japan’s auto industry, as manufacturers race to catch up in electric vehicles and software. Honda and Nissan plan to standardize vehicle platforms, integrate research and development, and optimize manufacturing facilities to cut costs.
The companies face hurdles before completing the merger, including shareholder and regulatory approvals. Either party would need to pay a ¥100 billion ($700 million) breakup fee if they pursue a competing deal.
The merger discussions follow preliminary partnership agreements signed in March and August 2024 focused on electric vehicles and software development. Both companies have struggled to match the scale of larger rivals in the capital-intensive transition to EVs.
Shares of both companies will be delisted from the Tokyo Stock Exchange when the deal closes, with the new holding company taking their place on the bourse’s Prime Market.
