Official announcement! Honda and Nissan officially start merger negotiations.On Monday, December 23, Japanese automakers Honda Motor Co. and Nissan Motor Co. held a press conference in Tokyo, announcing that Honda, Nissan, and Mitsubishi Motors have signed a memorandum of understanding, and Honda and Nissan will officially begin merger negotiations, while Mitsubishi Motors will discuss its participation in the merger.The press conference stated that Honda and Nissan will jointly invest to establish a holding company, with both parties acting as subsidiaries of this holding company, thus facilitating the merger. The two sides plan to reach a final merger agreement by June 2025, with the holding company expected to be officially established and listed in August 2026. Details such as the name of the holding company, shareholding ratios, and personnel arrangements will be further clarified through subsequent negotiations.Honda President Toshihiro Mibe stated that the new company after the merger will be led by Honda, including having more than half of the board seats, while both parties will retain their respective brands and share vehicle platforms, with the company focusing resources on investments in electrification, software, and autonomous driving.Toshihiro Mibe mentioned that this negotiation is driven by the need to maintain global competitiveness in a &#34;rapidly changing business environment,&#34; and Nissan President Makoto Uchida added:<blockquote>&#34;As new participants enter our market, economies of scale are becoming increasingly important.&#34;</blockquote><h2>Another global automotive giant is born; can it help Nissan escape the quagmire?</h2>Honda and Nissan are the second and third largest automakers in Japan, respectively. According to Japanese media analysis, if Mitsubishi Motors, which currently holds a 24.5% stake in Nissan, also joins the merger process, the annual vehicle sales of the merged company will exceed 8 million, making it the third largest automotive group in the world, after Toyota and Volkswagen.Based on the current market value, the merged company's value will reach $54 billion, and if Mitsubishi is included, the merged company's market value will reach $58 billion, but it is still far from its competitor Toyota's current market value of $287 billion.It is noteworthy that at the press conference, Honda President Toshihiro Mibe candidly stated that the success of the merger negotiations depends on Nissan's ability to successfully turn a profit:<blockquote>&#34;This is a transformation that happens once in a century; we need to be well-prepared to be more competitive on the battlefield in 2030.&#34;</blockquote>Amid the global wave of electrification transformation, Nissan faces the most severe challenges ever faced by all Japanese automakers. On one hand, there is a serious overcapacity, and on the other hand, the product mix of traditional vehicles is gradually being eliminated by the market, forcing Nissan to significantly cut jobs and slash its annual profit guidance by 70%.Wall Street Journal previously mentioned that Nissan's financial situation is in a very precarious state, making headlines several times. Reports indicate that it has only 12 to 14 months of cash reserves left, and the company is also facing pressure from activist shareholders and a heavy debt burdenIn fact, more than twenty years ago, Nissan was also on the brink of bankruptcy due to the financial crisis, but thanks to the strong intervention of the French automaker Renault, Nissan's corporate structure was completely reformed through the &#34;Nissan Revival Plan,&#34; successfully turning a profit in 1999, a year ahead of schedule.Whether this turnaround can be replicated today remains an unknown.On the day before Honda and Nissan officially announced merger negotiations, Nissan's former &#34;savior&#34;—former Renault CEO Carlos Ghosn publicly commented that the merger &#34;makes no sense&#34;:<blockquote>&#34;This is a desperate move. This is not a pragmatic deal, because frankly, it is difficult to find synergies between the two companies.&#34;</blockquote>

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If Mitsubishi Motors also joins the merger process in the future, the annual vehicle sales of the merged company will exceed 8 million units, making it the third largest automotive group in the world, after Toyota and Volkswagen. Honda President Toshihiro Mibe candidly stated that the success of the negotiations depends on whether Nissan can successfully achieve profitability

- Honda and Nissan have officially announced the start of merger negotiations, with a memorandum of understanding signed by Honda, Nissan, and Mitsubishi.  
- The two companies plan to establish a holding company by June 2025, aiming for a market value of $54 billion, which could rise to $58 billion if Mitsubishi joins.  
- The success of the merger depends on Nissan's ability to return to profitability amid significant financial challenges, as highlighted by former Renault CEO Carlos Ghosn's critical remarks on the merger's viability.

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Nissan and Honda officially launched merger negotiations, planning to complete it by 2026, with a post-merger scale ranking third globally