Honda And Nissan Merger Talks Underway

Honda and Nissan have begun discussing a potential merger.

Convergence between Honda and Nissan could create a $54 billion automotive behemoth, producing 7.4 million vehicles annually and ranking as the world’s third-largest automaker behind Toyota and Volkswagen. The partnership could also include Mitsubishi Motors, where Nissan holds a 24% stake, bolstering the combined group’s global footprint.

Honda and Nissan already formalized a strategic partnership in March—along with Mitsubishi— to cooperate on electric vehicle development.

Nissan recently announced a $2.6 billion cost-saving plan, including job cuts and reduced production capacity, following an 85% drop in second-quarter profit. News of a potential merger with Honda sent Nissan shares surging by 24%—their biggest one-day jump on record.

Sources told Reuters discussions so far have focused on ways to improve collaboration efficiencies, along with the possibility of setting up a holding company. A full Honda-Nissan merger could face significant obstacles, including integration challenges and cultural differences. Regulatory scrutiny in the U.S. could further complicate matters.

Honda, whose market capitalization is more than four times that of Nissan, is also under pressure. While its hybrid lineup has been successful, its EV push has faced challenges, and the company anticipates deteriorating cash flow next year.

Meanwhile, Bloomberg reports Taiwanese electronics giant Foxconn has approached Nissan with a proposal to acquire a controlling stake, adding urgency to the talks, according to people familiar with the matter. Foxconn wants all of Nissan, not just its manufacturing operations.

While it remains unclear how substantive talks have taken been, the overture is said to have accelerated Honda and Nissan’s efforts to solidify their partnership.

Both Honda and Nissan are expected to provide updates on their discussions in the coming weeks. The automakers have declined to comment on specific details but have acknowledged exploring opportunities for collaboration.

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