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After a numerous reporting hinting at a joint venture of two Japanese manufacturers - Nissan and Honda, the news is finally out. Japanese marques - Nissan (Nissan Motor Co., Ltd.) and Honda (Honda Motor Co., Ltd.), have today signed a memorandum of understanding (MOU) to begin business integration and establish a joint holding company. In addition, Honda, Nissan, and Mitsubishi signed an MOU on March 15 to fast-forward the process of achieving a zero-traffic fatality and carbon-neutral society.
Marking the announcement, Nissan Director, President, CEO and Representative Executive Officer Makoto Uchida said: "Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone."
Honda Director and Representative Executive Officer Toshihiro Mibe said: "Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing. Honda and Nissan are two companies with distinctive strengths. We are still at the stage of starting our review, and we have not decided on a business integration yet, but in order to find a direction for the possibility of business integration by the end of January 2025, we strive to be the one and only leading company that creates new mobility value through a chemical reaction that can only be driven through the synthesis of the two teams."
Potential Opportunities From The MOU
By coming together, Nissan and Honda aim to take down the largest automaker and take the spot of a world-class mobility company. The duo is targeting to achieve a revenue exceeding 30 trillion yen and an operating profit of more than 3 trillion yen.
Expected synergies from the new joint holding company:
Standardization of vehicle platforms to achieve profitability
The brand will standardize platforms across its line-up to achieve cost efficiencies and reduced R&D costs. The integration will further reinforce sales and operations volumes while maximizing profits. With the mutual amalgam of global offerings, Nissan and Honda will be able to meet larger customer demands across the globe with ICE, HEV, PHEV, and EV vehicles.
Integration of R&D functions
With the joint research agreement on fundamental technologies signed on August 1, the two companies have started joint research in fundamental technologies in the area of vehicle platforms for next-generation software-defined vehicles (SDVs), which is the cornerstone of the field of intelligence.
Optimizing manufacturing systems and facilities
The companies anticipate that optimizing their manufacturing plants and energy service facilities, combined with improved collaboration through the shared use of production lines, will result in a substantial improvement in capacity utilization leading to a decrease in fixed costs.
Reinforcing supply chain by integration purchasing function
To fully leverage the synergies from optimizing development and production capacity, both companies intend to boost their competitiveness by improving and streamlining purchasing operations and sourcing common parts from the same supply chain and in collaboration with business partners.
Realizing cost synergies through operational efficiency improvements
The companies expect the integration of systems, back-office operations, sales channels, and talent pool, along with the upgrade and standardization of operational processes to drive cost reductions.
Process Of Business Integration & Stock Transfer
Nissan and Honda have announced their plan to set up through a joint share transfer, a joint holding company that will be the parent company of both companies. This will be subject to approval at each company's general meeting of shareholders and obtaining necessary approvals from relevant authorities for this business integration, based on the premise that Nissan's turnaround actions are steadily executed. Both Nissan and Honda will be fully owned subsidiaries of the joint holding company. Additionally, the companies plan to continue coexisting and developing the brands held by Honda and Nissan equally.
Schedule of business transfer
Event
Date
Execution of agreement concerning the business integration
June 2025 (planned)
Extraordinary shareholders' meeting of the companies
April 2026 (planned)
Delisting from the TSE
August 2026 (planned)
Effective date of the share transfer
August 2026 (planned)
Share transfer ratio
The share transfer ratio for the share transfer will be determined by the time of concluding the final definitive agreement regarding the business integration. The determination will be based on the results of due diligence, and third-party valuations with reference to the average closing prices of each company's shares over a certain period prior to the announcement of the MOU.
Management structure
At the time of the effective date of the share transfer, it is planned that Honda will nominate a majority of each of the internal and external directors of the joint holding company. The President and representative director or president and representative executive officer of the joint holding company will be selected from among the directors nominated by Honda.