Nissan and Honda Explore Business Integration Through Joint Holding Company

Nissan and Honda have signed a memorandum of understanding (MOU) to initiate discussions on a potential business integration, marking a significant development in the global automotive landscape. The integration would be achieved through the establishment of a joint holding company, to combine the strengths of both automakers to address rapidly evolving industry challenges. Mitsubishi Motors, on the other hand, aims to reach its conclusion by the end of January 2025 on the participation or involvement in the business integration between Nissan and Honda.

The MOU, signed on December 23, 2024, builds upon earlier agreements between the two companies, including a strategic partnership initiated in March to address the challenges of vehicle electrification and intelligence. The integration aims to accelerate efforts toward achieving carbon neutrality and zero traffic fatalities while enhancing the global competitiveness of both companies. This collaboration aligns with the automotive industry’s shift toward software-defined vehicles (SDVs) and next-generation mobility solutions. 

In August, the companies deepened their partnership by signing another MOU to conduct joint research on platforms for SDVs. This research focuses on critical technologies that underpin intelligence and electrification. The new joint holding company would serve as a vehicle to consolidate resources and deliver more innovative and attractive products to customers worldwide. 

If realised, the integration would leverage the strengths of both companies to achieve several synergies, including: 

1. Standard Platforms and Increased Scale: By unifying vehicle platforms, Nissan and Honda aim to reduce costs, enhance development efficiencies, and improve production processes. This strategy is expected to boost operational volumes and maximise profitability across internal combustion engine (ICE), hybrid-electric vehicle (HEV), plug-in hybrid-electric vehicle (PHEV), and electric vehicle (EV) offerings. 
2. R&D Integration: The companies plan to combine their research and development capabilities to advance fundamental technologies for SDVs, improve expertise, and reduce costs by eliminating redundancies. 
3. Optimised Manufacturing: Shared use of production lines and optimised plant operations are expected to enhance capacity utilisation and reduce fixed costs. 
4. Supply Chain Synergies: The integration of purchasing functions and streamlined supply chain operations could strengthen competitiveness and reduce costs by sourcing common components. 
5. Operational Efficiency: The companies plan to integrate back-office operations and standard processes to drive cost savings. 
6. Expanded Financial Services: By combining sales finance functions, the companies aim to deliver comprehensive mobility solutions, including innovative financial services, to customers throughout the vehicle lifecycle. 
7. Talent Development: Increased collaboration between employees and joint access to talent markets will foster innovation and attract exceptional talent for the era of electrification and intelligence. 

The proposed joint holding company would serve as the parent entity for both Nissan and Honda, with each company becoming a wholly owned subsidiary. The holding company is expected to be listed on the Tokyo Stock Exchange (TSE) in August 2026, while the shares of Nissan and Honda will be delisted. Shareholders of both companies would receive shares in the new holding company during the share transfer. 

Honda is expected to nominate a majority of the board members and executives of the holding company, including its president and representative executive officer. The organisational structure and management composition will be finalised before the definitive agreement is executed in mid-2025. 

The integration process is expected to take several years, with a detailed timeline outlined as follows: 

• June 2025: Signing of the definitive integration agreement. 
• April 2026: Extraordinary shareholder meetings to approve the integration. 
• August 2026: Delisting of Nissan and Honda shares and listing of the new holding company. 

The share transfer ratio will be determined closer to the final agreement date, based on due diligence and market valuations. 

Through this integration, Nissan and Honda envision becoming a world-class mobility company with projected sales revenues exceeding ¥30 trillion (approx. $191.61 billion) and operating profits of over ¥3 trillion (approx. $20.7 billion). By aligning their efforts, the companies aim to create a robust foundation for future growth and innovation, contributing to Japan’s industrial base and the global automotive industry. 

While the integration is still in the exploratory phase, it represents a bold step toward reshaping the competitive landscape of the automotive sector. The final decision on the integration is expected by January 2025, following thorough due diligence and stakeholder consultations.