Nissan Motor Co. has been discussing a potential merger with Honda Motor Co, which could be announced as early as December 23. The merger would form the world’s third-largest car manufacturer.
A merger between Honda and Nissan would streamline the Japanese auto industry into two main groups: one led by Honda, Nissan, and Mitsubishi, and the other by Toyota Motor Corporation and its affiliates.
Nissan’s recent difficulties became apparent in early November when it cut its profit forecast and announced plans to lay off 9,000 employees and reduce global output by 20%.
Despite producing slightly more cars, Honda’s market value is over four times that of Nissan, strengthening its position in merger negotiations.
Foxconn, the Taiwan-based iPhone producer, has also expressed interest in acquiring a stake in Nissan. It is unclear if Nissan is in talks with Foxconn or has declined their overtures.
French automaker Renault SA, which owns 36% of Nissan, will play a vital role in any potential deal. Renault supports Nissan exploring merger talks with Honda to protect itself from issues affecting Nissan.
Since news surfaced about the potential merger, Nissan’s shares surged 24%, the biggest jump in its history, while Honda’s stock fell 3%.
By CEO NA Editorial Staff
