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

The Tokyo Stock Exchange has temporarily suspended trading of Nissan shares amid news that the automaker is in merger talks with Honda.

NHK reported on December 18th that two major automakers, Honda and Nissan, are in talks about a merger. Sources indicate that the two companies are considering forming a holding company to act as the parent company for both Honda and Nissan.

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

According to Kyodo News, the merger news comes amid intense global competition in the electric vehicle sector and other industries. Japan's second and third-largest automakers (after Toyota) are looking to join forces to challenge electric vehicle manufacturers from China and the United States.

In March, Honda and Nissan agreed to begin research into strategic cooperation in electric vehicle manufacturing and software technology to reduce costs and improve competitiveness. By August, Mitsubishi Motors had also joined the dialogue.

Honda CEO Mibe Toshihiro said at the time that the dialogue was unrelated to capital constraints but did not rule out the possibility of it in the future.

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

Both Honda and Nissan have faced business challenges 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), a 14.2% decrease from the previous year, due to weaker-than-expected vehicle sales in China.

In the same month, Nissan announced plans to cut 9,000 jobs and reduce global productivity by 20% due to continued business difficulties in the US and China.

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

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