Rumors of Honda and Nissan negotiating a merger, Tokyo suspends trading of Nissan shares

The Tokyo Stock Exchange has suspended trading in Nissan shares amid reports the automaker is in merger talks with Honda.

NHK reported on December 18 that two major automakers, Honda and Nissan, are in talks about a merger. The sources said the two companies are considering establishing a holding company that would be the parent company of both Honda and Nissan.

Nissan CEO Uchida Makoto (left) and Honda CEO Mibe Toshihiro at a joint press conference in August.

Kyodo News reported that the merger news comes amid fierce global competition in electric vehicles and other industries. Japan’s second and third largest automakers (after Toyota) want to join forces to challenge electric car makers from China and the US.

In March, Honda and Nissan agreed to begin exploring strategic collaboration in electric vehicles and software technology to reduce costs and improve competitiveness. In August, Mitsubishi Motors joined the dialogue.

Honda General Director Mibe Toshihiro said at the time that the dialogue was not related to the capital-binding plan but did not rule out the possibility in the future.

Immediately after the above information appeared, the Tokyo Stock Exchange temporarily suspended trading of Nissan shares to prevent impact on investors' decisions, according to AFP.

Honda and Nissan have both struggled this year. In November, Honda cut its net profit forecast for the current fiscal year (ending March 2025) to 950 billion yen ($6.2 billion), down 14.2 percent from a year earlier, due to weaker-than-expected sales in China.

That same month, Nissan announced plans to cut 9,000 jobs and reduce global capacity by 20% as business in the US and China continued to struggle.

According to Reuters, Honda and Nissan's combined global sales in 2023 will be 7.4 million vehicles. Honda's market capitalization is $38.8 billion while Nissan's is $7.6 billion. If the merger goes through, it would be the largest auto deal since the $52 billion merger between Fiat Chrysler and PSA in 2021, creating Stellantis.

Source: https://thanhnien.vn/ro-tin-honda-va-nissan-dam-phan-sap-nhap-tokyo-cho-dung-giao-dich-co-phieu-nissan-18524121807462858.htm