Honda and Nissan Gear Up for Merger: A Bold Move to Drive Japan's Auto Industry Forward
1min read Reports from Japan's Daily News on December 24 highlight a significant development in the automotive sector, where Japanese car manufacturers Honda and Nissan have initiated merger discussions. The country's Minister of Economy, Trade and Industry, Koichi Hagiuda, has responded affirmatively to the potential merger, expressing hope that it could bolster the competitiveness of Japan's automotive industry.
Hagiuda remarked on the rapidly evolving competitive landscape of the automotive industry, emphasizing that Japanese automakers must be willing to take bold steps to secure their position in the international market. The merger between Honda and Nissan is seen as a strategic move to navigate the challenges and opportunities arising from global competition and innovation in the automotive sector.
The proposal for the merger includes the creation of a holding company, jointly funded and held as subsidiaries by both Honda and Nissan. The merger plan sets ambitious timelines, with an aim to finalize the agreement by June 2025. The governance of the new entity will see Honda appointing a majority of the board members, including the CEO. The holding company is expected to go public by August 2026, at which point both Honda and Nissan plan to delist as independent entities.
The potential merger also raises questions regarding international acquisitions, particularly given previous reports of Foxconn's interest in acquiring a majority stake in Nissan. Under Japan's Foreign Exchange and Foreign Trade Act, which aims to prevent critical technology leaks, Nissan is listed for prior government scrutiny. Hagiuda noted the dual-edge nature of international mergers and acquisitions—while they can integrate valuable international capital and expertise into Japanese companies, they also pose risks of technological leaks and supply chain disruptions, which the government is keenly aware of.
