Honda and Nissan officially begin merger talks to create world's third-largest automaker

Japanese automakers Nissan and Honda on Monday announced they had entered into official talks to merge and create the world's third-largest automaker by sales.

In a press conference on Monday, Honda CEO Toshihiro Mibe said the companies needed greater scale to compete in the development of new technologies in electric vehicles and intelligent driving. A business integration would give the companies an "edge that will not be possible under the current collaboration framework," Mibe said, according to a translation.

The deal would aim to share intelligence and resources and deliver economies of scale and synergies while protecting both brands, he said.

A holding company would be formed as the parent company of both Honda and Nissan, listed on the Tokyo Stock Exchange. The larger Honda will nominate most of the integrated entity's board members. The merged group has the potential to deliver revenue of 30 trillion yen ($191.4 billion) and operating profit of over 3 trillion yen, he said.

Mibe added that if approved, the integration would be a mid to long-term project that is currently not expected to show visible progress until 2030 and beyond.

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