Honda, Nissan to begin discussions on possible merger: Report

Honda and Nissan are looking to begin talks on a possible merger that could eventually encompass Mitsubishi Corporation, Bloomberg noted citing Nikkei.This deal could effectively form an auto rival to Toyota Motor Corp, amalgamating the auto industry into two factions, while also giving Nissan and Honda more ammunition to  take on larger rivals, Bloomberg noted. 

After downsizing partnerships with other global carmakers: Nissan's partnership with Renault and Honda's with GM. The step towards an amalgamation follows both the companies' decision to  come together for software and electric vehicle batteries, at which time, Honda's Mibe had alluded to a possible capital tie up with Nissan, the newswire stated. 

Both the firms did not respond to the report but separately gave statements reemphasising earlier pledges for further cooperation. The two Japanese carmakers aim to sign an MoU to assess shared equity interests in a new holding firm, Nikkei said without naming sources.

A Nissan spokesperson said, “The content of the reports that Honda, Nissan and MMC are considering a business integration is not based on an announcement from our company.

As announced in March and August of this year, Nissan, Honda, and MMC are considering various possibilities for future collaboration including the content of the report, but no decisions have been made. If there are any updates, we will inform all stakeholders at the appropriate time."

Should the companies merge, it will create a 6.7 million unit group greater than GM but tailing Hyundai.The reported merger talks come after the Financial Times said last month that Nissan was looking for an anchor investor to replace part of Renault’s equity holding and that it hadn’t ruled out having Honda buy some of its shares.