Investing.com– Honda Motor Co., Ltd. (TYO:) and Nissan Motor Company Limited TYO (TYO:) aims to finalize terms for a potential merger by June 2025, Japanese public broadcaster NHK reported Monday, amid a slew of reports that the two companies are considering a merger.
Honda The NHK report said that Nissan (NYSE:) and Nissan (OTC:) have already signed a basic merger agreement, and will hold a press conference later on Monday to announce the deal. The two aim to finalize the deal by June 2025.
Mitsubishi Motors Company (TYO:) – of which Nissan is the largest shareholder – will also announce its consideration of joining the merger.
Honda and Nissan plan to first establish a holding company under which the two companies will be combined. The deal could constitute the third largest automaker in the world in terms of sales.
Reports of the potential merger come as both Honda and Nissan struggle with declining sales overseas, especially in key auto market China. The growing demand for electric vehicles in the country has eroded Honda and Nissan's market shares in particular, as has the ongoing price war in the electric vehicle market between Tesla (NASDAQ:) and its Chinese rivals.
Weak demand for new cars in the United States and Europe has also eroded sales in recent years.
Shares of Honda, Nissan and Mitsubishi rose between 1.3% and 3% after the report. Nissan shares rose sharply last week after news of the potential merger first emerged.
