'CRISIS' TALKS
Iconic car brand ‘on brink of collapse’ set to merge with TWO rival firms to create £46bn merger to battle Tesla
The deal would be the biggest in Japanese automotive history
AN ICONIC car brand reportedly "on the brink of collapse" is set to join forces with two rival firms in a landmark deal.
Honda and Nissan have signed a memorandum of understanding to launch talks that could lead to a £46billion merger.
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The consolidation - which would be the biggest in Japanese automotive history - could also include Mitsubishi Motors, which has been in alliance with Nissan since 2016.
It comes after reports in recent weeks suggest Nissan could go under within 12 months if it doesn't receive financial support.
Any merger could mean each party sharing factories to build vehicles - and could even see Honda return to the UK after three years away.
It could also create a group big enough to compete with the likes of Tesla and Japan's number one motoring company Toyota going forward.
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Honda and Nissan said at a press conference in Tokyo yesterday they aim to reach a definitive agreement by June next year - and hope to complete the deal in August 2026, reports the .
Mitsubishi has signed a separate memorandum of understanding, and will decide whether to formally join talks next month.
Honda chief executive Toshihiro Mibe said the talks had been driven by the need to maintain global competitiveness in the face of a “drastically changing business environment”.
Makoto Uchida, chief executive of Nissan, said that they were needed “as new players make inroads in our markets and economy of scale is increasingly important”.
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If talks are successful, the companies will be united under a holding company - led by Honda - worth £46billion if all three firms join.
However, the merger would still be dwarfed by domestic rival Toyota, which is currently worth an estimated £229billion.
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Honda is around four times bigger than Nissan in market capitalisation.
However, Mibe shot down any suggestion the potential deal represented a rescue for Nissan.
“That is wrong. We want to lay out the benefits we will be able to obtain [from integration]. This is not about saving Nissan,” he said.
Meanwhile, Seiji Sugiura, analyst at Tokai Tokyo Intelligence Laboratory, told the FT finalising a deal by summer 2026 would be difficult.
“I think [Honda] will be surprised at how bad a shape Nissan is in,” he said.
Honda and Nissan have already discussed their outline plans with representatives of Japan’s Ministry of Economy, Trade and Industry, according to government officials.
The ministry raised the idea of a Honda-Nissan merger in late 2019.
A potential spanner in the works could also be Renault, which owns more than a third of Nissan.
The French firm said yesterday: "As Nissan’s main shareholder, Renault Group will consider all options in the best interests of the group and its stakeholders."
Nissan was one-third of a strategic deal with Mitsubishi and Renault to share financial backing and expand all their markets in Europe, Japan and the US dating back to 1999.
A previous report from the - prior to confirmation of merger talks with Honda - cites two anonymous "senior officials" at the firm suggested Renault is looking to reduce its financial stake in Nissan.
The withdrawal of funding means, according to the same sources, that Nissan could require support from the Japanese or US governments within the next year just in order to stay afloat.
One of the officials said: "We have 12 or 14 months to survive.
"This is going to be tough.
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"And in the end, we need Japan and the US to be generating cash."
Nissan has already cut 9,000 jobs across its global operation, while its CEO Makoto Uchida took a 50% pay cut in an economy drive.
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