Japanese automakers Nissan and Honda agreed to consider merging and forming a joint holding company, which would create the world’s third-largest automaker.

The two companies said in a statement Monday that they would target combined revenue of $191 billion and operating profit of more than $19 billion through the potential merger.

The companies hope to complete negotiations around June 2025 and establish a holding company by August 2026, when both companies’ shares will be delisted.

The merger talks come as both automakers struggle to compete with the largest global electric vehicle makers, including Tesla and Chinese automaker BYD.

WHAT A HONDA-NISSAN MERGER COULD MEAN FOR THE AUTO INDUSTRY AND CONSUMERS

Makoto Uchida (left), Director, Representative Executive Officer, President and CEO of Nissan Motor Corporation, and Toshihiro Mibe (right), Director, President and Representative Executive Officer of Honda, hold a joint press conference on their merger (Reuters / Reuters Photos)

The merger would create the third largest car company in the world by vehicle sales after Toyota and Volkswagen.

Honda, the second-largest Japanese automaker after Toyota, has a market capitalization of more than $40 billion, while third-place Nissan is worth about $10 billion.

“Today is a pivotal moment as we begin conversations about business integration that has the potential to shape our future,” Makoto Uchida, Nissan director, president, CEO and representative executive officer, said in a statement. “If we realize this, I believe that by combining the strengths of both companies, we can provide unparalleled value to customers around the world who value our respective brands. Together we can offer them a unique way to enjoy cars that neither company could achieve alone.”

The Honda-Nissan merger would create the third largest automobile company in the world by vehicle sales. (Reuters / Reuters Photos)

Honda Director and Representative Executive Officer Toshihiro Mibe said: “Creating new mobility values ​​by bringing together the resources, including knowledge, talent and technologies, that Honda and Nissan have developed over many years is critical to meeting the challenging environmental changes of the world the automotive industry.” is in front of us.

“Honda and Nissan are two companies with particular strengths,” Mibe added. “We are still at the beginning of our review and have not yet decided on business integration, but in order to find direction for the possibility of business integration by the end of January 2025, we strive to be the only leading one “Company that creates new mobility values ​​through chemical reactions that can only be advanced through the synthesis of the two teams.”

HONDA and NISSAN REPORTEDLY PLANNING TO BEGIN MERGER TALKS IN LIGHT OF EV COMPETITION: REPORT

Honda and Nissan also agreed to extend cooperation to Mitsubishi Motors. (Reuters / Reuters Photos)

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The majority of the holding’s board is appointed by Honda.

The companies have been looking for ways to strengthen their partnership. In March, among other things, they announced that they were considering a partnership in electrification and vehicle intelligence, and in August announced an agreement to conduct joint research on enabling technologies in the area of ​​platforms for next-generation software. defined vehicles.

They also agreed to extend the collaboration to Mitsubishi Motors.

Reuters contributed to this report.