TOKYO: Honda Motor Co and Nissan Motor Co are exploring a potential merger, according to people familiar with the matter, which would create a singular rival to Toyota Motor Corp in Japan and better position the combined company to face competitive challenges around the world.
Honda is considering several options including a merger, capital tie-up or the establishment of a holding company, executive vice-president Shinji Aoyama said yesterday following reports overnight of talks between the carmakers.
Aoyama declined to elaborate on when a potential decision will be made. The companies could make an announcement on Dec 23, TBS reported.
The two have been holding preliminary talks about a combination, said the people, who asked not to be identified because discussions are private. One option being considered is the creation of a new holding company under which the combined businesses would operate, one of the people said.
The transaction could also be expanded to include Mitsubishi Motors Corp, which already has capital ties with Nissan, the person said. Mitsubishi shares jumped 17%. Discussions are early stage and may not lead to an agreement, the people said.
A deal would effectively consolidate the Japanese auto industry into two main camps: One controlled by Honda, Nissan and Mitsubishi and another consisting of Toyota group companies.
It would also provide them with more resources to compete with larger peers globally after downsizing long-held partnerships with other carmakers. — Bloomberg
