A sign marking the location of a Honda dealership in Libertyville, Illinois on December 18, 2024.
Scott Olson | getty images
Japanese automaker shares Honda Then were on their way to their best day in 16 years Buyback of up to 1.1 trillion yen ($7 billion) announced Its shares rose on Monday amid merger talks. Nissan,
Nissan And Honda said they have started Official negotiations for mergerWhich can make them the world’s third largest car manufacturing company in terms of sales.
Honda also announced to buy back 24% of its issued shares by December 23 next year. Its shares were last up 15.51%, and if the gain continues it would be its best day since October 2008. Nissan shares fell more than 1%.
The Honda-Nissan deal will focus on sharing knowledge and resources, achieving economies of scale and creating synergy. Honda CEO Toshihiro Mibe saidA holding company will be established as the parent organization for both Honda and Nissan and will be listed on the Tokyo Stock Exchange.
“These two companies are operating in the same market and their brand image is very similar, their products are very similar,” Hakan Dogu, president of Alagan Mobility Solutions, told CNBC on Tuesday.
“The new management faces a major challenge in differentiating the product range and expanding the business,” he said.
Honda shares year-on-year
Discussions are scheduled to conclude in June 2025.
Nissan’s strategic partner Mitsubishi has been given the opportunity to join the new group and a decision is expected by the end of January 2025.
Honda informed 1.382 trillion yen in operating profit for the full year through March 2024, versus Nissan’s 568.7 billion yen. The total value of the automakers would be about $54 billion, with Honda’s market capitalization accounting for more than $43 billion.
analysts suggested The potential merger stems from Nissan’s financial struggles and the restructuring of its long-standing partnership with France’s Renault.
In its latest quarterly report, Nissan announces plans to cut 9,000 jobs And will reduce its global production capacity by 20%.
—CNBC’s Jenny Reed contributed to this report.
