Honda Motor Co. and Nissan Motor Co. took their first steps toward an historic merger that would create a new force in the world’s automotive industry, as aggressive competition from China forces legacy carmakers to rethink their business models.

The two Japanese auto manufacturers signed a basic agreement for merger talks on Monday, according to a joint media briefing held in Tokyo. Honda also said it will buy back as much as ¥1.1 trillion yen ($7 billion) of its own shares.

A holding company will be created to house the new entity and should be listed by August 2026, the firms said, adding that Honda will be able to nominate a majority of the new company’s board of directors.


Honda, Nissan Announcement on Merger Agreement
Nissan CEO Makoto Uchida, from left, Honda CEO Toshihiro Mibe and Mitsubishi CEO Takao Kato attend a news conference on Dec. 23.Photographer: Kiyoshi Ota/Bloomberg
Mitsubishi Motors Corp., which is 24.5% owned by Nissan, also signed the memorandum of understanding and will likely be part of the group with a final decision on that expected by the end of January.


Honda’s buyback cancels a previously announced one of ¥100 billion and will start on Jan. 6 and run through most of 2025, according to Monday’s announcement. The company plans to repurchase as many as 1.1 billion shares, or almost 24% of its stock excluding treasury securities.

The large buyback is being launched now because such transactions face regulatory limits while merger talks are underway, the companies said.

Key Players in the Nissan-Honda Merger Talks

Source: Bloomberg
Honda Chief Executive Officer Toshihiro Mibe said synergies from the combined company should lead to an increase in operating profit of more than ¥1 trillion, eventually climbing to ¥3 trillion.

“Both companies will continue as wholly owned subsidiaries of the joint holding company with their respective brands in place,” Mibe said, adding that Honda will take the lead as the new company is being formed.

The holding company will include the brands of both Honda and Nissan, and wrap in Honda’s large motorcycle unit. Other details, like what factories may be shut or streamlined, weren’t addressed.

Read more: Dire Situation in China Is One Reason for Honda, Nissan Merger

Such an alliance would give rise to one of the world’s largest carmakers, pitting the trio against Toyota Motor Corp. at home and Chinese automakers abroad, including BYD Co. and Geely Automobile Holdings Ltd. Toyota has stakes in Subaru Corp., Suzuki Motor Corp. and Mazda Motor Corp., creating a powerhouse of brands backed by its top-notch credit rating.


All three Japanese companies are to some degree facing an existential threat brought on by the global automobile industry’s breakneck shift to battery-powered electric vehicles and hybrid drivetrains and away from combustion engine cars.


Honda, Nissan Announcement on Merger Agreement
Uchida, left, and Mibe.Photographer: Kiyoshi Ota/Bloomberg
In China, the soaring popularity of locally made EVs has foreign brands fighting for survival, and Japanese carmakers there are stuck with too much capacity. Honda and Nissan have both had to pare back staffing and production, while Mitsubishi Motors Corp. has all but extricated itself from China, the world’s biggest car market.

Meanwhile, a rebound in sales of hybrid gas-electric cars in North America has left Nissan on the backfoot while Toyota, a pioneer in hybrid technology, has received a welcome boost. Nissan missed that window of opportunity due to its outdated product lineup that was missing attractive options for hybrids, much less any competitive EVs.

For Nissan, the merger with Honda could provide much-needed relief after paltry sales in the US and China triggered a huge drop in revenue, forcing the battered carmaker to cut jobs, slash production capacity and lower its annual profit outlook by 70%.

Adding up the Numbers of a Honda-Nissan Merger
Honda is in decent shape. Nissan, not so much

Sources: Data from companies and the Bloomberg Terminal
“Partnering with Honda isn’t a sign that we’re giving up on our plans to turn Nissan around,” Nissan CEO Makoto Uchida said Monday.


Nissan was rescued from its last financial crisis more than two decades ago when French carmaker Renault SA swooped in with a cash injection and dispatched Carlos Ghosn to orchestrate a turnaround. Ghosn’s shock arrest and ouster in late 2018 paved the way for Uchida to take the helm.

Ghosn has resided in Beirut since his daring escape from Japan five years ago. While on bail facing charges of financial misconduct, he hired a father-son extraction team to smuggle him onto a private plane in a music-equipment box and flew to Lebanon, which rarely extradites its citizens.

The exiled executive weighed in again about the merger on Monday, saying that to him, it doesn’t make sense.

Speaking at the Foreign Correspondents’ Club of Japan via teleconference, Ghosn pointed out that Nissan’s unit sales have fallen more 40% since 2018, and the carmaker has gone from making billions of dollars in revenue every year to barely breaking even.

Nissan’s sinking share price — the stock is down 19% this year — and financial travails have also caught the attention of activist investors. Singapore’s Effissimo Capital Management Pte took a 2.5% stake in November.

Read more: Hedge Fund Effissimo Stirs Speculation With Its Stake in Nissan

While it’s fair to say the merits of a merger aren’t as obvious for Honda, a partnership with Nissan and Mitsubishi Motors would provide the scale and competitive edge it’s been seeking for years to maintain its presence in a global industry increasingly dominated by consolidated, big players.

“There are just too many Japanese carmakers, and mergers are becoming necessary to become more competitive, globally,” said Hiroki Ihara, an analyst at Tachibana Securities Co. said last week when reports of a tie-up emerged.


Uchida and Mibe also said they didn’t know anything about Hon Hai Precision Co., the Taiwan-based iPhone maker known as Foxconn, showing interest in a takeover of Nissan.

People familiar with the matter said last week that Foxconn sent a delegation to meet with Renault — which owns 36% of Nissan and will therefore have a say in any merger — in France. However Foxconn has now put its interest in pursuing Nissan on hold while negotiations with Honda are underway, one person said.

Honda e Nissan hanno annunciato ufficialmente il piano di fusione. Entro fine gennaio anche Mitsubishi Motors dichiarerà se farà parte di questa alleanza (ovviamente sì).
Entro agosto del 2026 sarà quotata in borsa la holding di controllo delle due società, Honda sarà al comando dell’azienda.
Dal punto di vista finanziario è Nissan che ha bisogno di Honda e non viceversa, però i maggiori volumi aiuteranno entrambe.
Sommando le tre aziende automobilistiche giapponesi si ottiene per volume il terzo costruttore più grande al mondo, naturalmente con la fusione scenderanno i volumi, soprattutto a causa del taglio della capacità produttiva in corso a Nissan.

Chissà tecnicamente cosa vedremo grazie a questo merge.

Avremo la QASHQAVIC

E la produrranno in Serbia, ça va sans dire.

_________________
-- LE IENE PORTANO BENE --
- Renault New Laguna Sportour 4Control 2.0 dCi 150cv - 06/2010 -
- Suzuki GSR 600 K6 - 04/2006 -
- Ford Transit VII T350L 2.2 Tdci 140 cv - 06/2008
- [New entry] Lancia Delta Oro 1.4 T-Jet GPL 120 cv - 09/2008

Durante la conferenza stampa è stata citata la possibilità che Honda sviluppi pick up e suv su telaio a langheroni di Nissan come Armada, Frontier e Titan. Bisogna poi vedere che fine faranno gli accordi di Nissan con Renault e di Honda con Gm.

Renault holds a 35.7 percent interest in Nissan. (BLOOMBERG)
BN
By:
Bloomberg News
January 16, 2025 02:22 PM
Honda has asked Nissan whether it would be able to acquire Renault’s shareholding, according to a Kyodo News report, as the two Japanese automakers prepare to combine in an effort to gain scale in an increasingly competitive car market.

Renault holds a 35.7 percent interest in Nissan, according to data compiled by Bloomberg, which is worth around 557 billion yen ($3.6 billion).

Honda is concerned that Nissan could fall under an undesirable foreign influence should Renault’s stake be snapped up by a third party while negotiations to absorb Nissan are underway, Kyodo said on Jan. 16, citing people familiar with the matter it did not identify.

Representatives for Honda and Nissan declined to comment.

Nissan and Renault have an alliance dating back to 1999 that Mitsubishi Motors joined in 2016.

Sign up for the Automotive News Europe Daily to get the top news of the day in Europe every business weekday.

Honda and Nissan kicked off negotiations late last year to combine in a move that would effectively split Japan’s car market in two as the global industry trends toward greater consolidation to compete with electric-vehicle makers led by Tesla in the U.S. and BYD in China.

Publishing Partner Sponsored Content from Ally
Publishing Partner:
Sponsored Content from Ally
Perks of Financing Certified Used Vehicles with Ally.
When your customers are shopping for a used vehicle, they’re often looking for a car, truck or SUV that’s not only affordable, but also reliable – and a certified pre-owned vehicle is an attractive option.
Image
Multimedia Content
Leading up to that announcement in December, rumors circulated that Hon Hai Precision Industry, the iPhone maker known as Foxconn, was interested in a partial or complete takeover of Nissan to utilize its manufacturing capacity and bolster its own foray into EVs.

Seeing one of its automakers fall into Taiwanese hands would have been unpalatable to the Japanese government. Honda and Nissan have said they plan to announce a framework for their deal by the end of this month and aim to list a separate holding company that would house the two businesses by August 2026.

Nissan may not have the funds to buy the Renault stake

Whether Nissan would have the funds to buy out Renault’s stake, however, is questionable. Nissan’s market value has slumped to about 1.56 trillion yen, while its cash and cash equivalents were around 1.52 trillion yen as of Dec. 31.

Nissan is also struggling financially, which is one reason why a tie-up with Honda is appealing. In November, Nissan said it would dismiss 9,000 workers and cut a fifth of its manufacturing capacity after net income plummeted 94 percent in the first half of its fiscal year.

Nissan now sees its operating income plunging to just 150 billion yen in the year ending in March, down 70 percent from its previous forecast.

Management also lowered their revenue outlook by more than 9 percent, meaning they now expect virtually no growth for the year.


Honda starebbe cercando di comprare il 35% delle quote di Nissan che Renault ha ancora possiede. Ricordo che 2 anni fa Renault aveva accettato di ridurre la propria quota del 43% in Nissan fino a scendere al 15%, perdendo così il controllo. Già adesso Renault può esercitare solo il 15% del diritto di voto in Nissan.
L’ 8% è già stato venduto mentre il restante 35% è parcheggiato in una holding.
Penso che Renault venderà, le azioni sono crollate e mai ritorneranno ai valori in bilancio. I giapponesi hanno fatto tutto per far deragliare l’alleanza e ci sono riusciti.
De Meo infatti ha costruito alleanze al di fuori di Nissan e Mitsubishi, ci sono ancora diversi progetti comuni ma entro la fine del decennio arriveranno al termine della loro vita commerciale.