Nissan Motor Co., Ltd. and Honda Motor Co., Ltd. have signed a memorandum of understanding (MOU) to start discussions and considerations toward a business integration between the two companies through the establishment of a joint holding company.
To further accelerate their efforts toward achieving a carbon-neutral society and a zero traffic-fatality society, Nissan and Honda signed an MOU regarding a strategic partnership for the era of vehicle intelligence and electrification. Since then, the two companies have held discussions aimed at collaboration in various fields.
Both companies signed a further MOU to deepen the framework of the strategic partnership. The companies also announced that they had agreed to carry out joint research in fundamental technologies in the area of platforms for next-generation software-defined vehicles (SDVs), particularly in the areas crucial for intelligence and electrification, to advance focused discussions toward more concrete collaboration.
Throughout the process, Nissan and Honda have engaged in discussions in consideration of various possibilities and options. At the same time, the business environment for both companies and the wider automotive industry has rapidly changed and the speed of technological innovation has continued to accelerate. The MOU between Nissan and Honda announced is aimed to serve as an option to maintain global competitiveness and for the two companies to continue to deliver more attractive products and services to customers worldwide.
If the business integration can be realized, both companies can aim to integrate their respective management resources such as knowledge, human resources, and technologies; create deeper synergies; enhance the ability to respond to market changes; and expect to improve mid- to long-term corporate value. Additionally, Nissan and Honda can aim to further contribute to the development of Japan’s industrial base as a “leading global mobility company” by integrating Nissan and Honda’s four-wheel-vehicle and Honda’s motorcycle and power products businesses, enabling the brands of both companies to become more attractive and to deliver more attractive and innovative products and services to customers worldwide.
Nissan director, president, chief executive officer and representative executive officer Makoto Uchida said: “Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
Potential synergies from the business integration
Nissan and Honda will establish an integration preparatory committee to facilitate a smooth integration and will conduct focused discussions.
Based on the committee’s discussions, as well as the results of due diligence, the companies will examine and analyze more specific synergies. By promptly realizing the synergies from the integration, Nissan and Honda can aim to become a world-class mobility company with sales revenue exceeding 30 trillion yen and operating profit of more than 3 trillion yen.
The expected synergies from the business integration at this time are:
Scale advantages by standardizing vehicle platforms
By standardizing the vehicle platforms of both companies across various product segments, the companies expect to create stronger products, reduce costs, enhance development efficiencies, and improve investment efficiencies through standardized production processes.
The integration is projected to increase sales and operational volumes, allowing the companies to reduce development costs per vehicle, including for future digital services, while maximizing profits.
By accelerating the mutual complementation of their global vehicle offerings – including ICE, HEV, PHEV, and EV models – Nissan and Honda will be better positioned to meet diverse customer needs around the world and deliver optimal products, leading to improved customer satisfaction.
Enhancement of development capabilities and cost synergies through the integration of R&D functions
In accordance with the MOU to deepen strategic partnership and the joint research agreement on fundamental technologies dated August 1, the two companies have started joint research in fundamental technologies in the area of vehicle platforms for next-generation software-defined vehicles (SDVs), which is the cornerstone of the field of intelligence. After the business integration, both companies will encompass more integrated collaboration across all R&D functions, including fundamental research and vehicle application technology research. This approach is expected to enable both companies to efficiently and swiftly enhance their technological expertise, achieving both improvements in development capabilities and reductions in development costs through the integration of overlapping functions.
Optimizing manufacturing systems and facilities
The companies anticipate that optimizing their manufacturing plants and energy service facilities, combined with improved collaboration through the shared use of production lines, will result in a substantial improvement in capacity utilization leading to a decrease in fixed costs.
Strengthening competitive advantages across the supply chain through the integration of purchasing functions
To fully leverage the synergies from optimizing development and production capacity, both companies intend to boost their competitiveness by improving and streamlining purchasing operations and source common parts from the same supply chain and in collaboration with business partners.
Realizing cost synergies through operational efficiency improvements
The companies expect that the integration of systems and back-office operations, along with the upgrade and standardization of operational processes, will drive significant cost reductions.
Acquisition of scale advantages through integration in sales finance functions
By integrating relevant areas of sales finance functions of both companies and expanding the scale of operations, the companies aim to provide a range of mobility solutions, including new financial services throughout the vehicle lifecycle, to customers of both organizations.
Establishment of a talent foundation for intelligence and electrification
The human resources of the companies are an invaluable asset, and establishing a strong human resource foundation is crucial for the transformation that will come with the business integration. After the integration, increased employee exchanges and technical collaboration between the companies are expected to promote further skill development. Moreover, by leveraging each company’s access to talent markets, attracting exceptional talent will become more attainable.
Method of business integration and stock listing
Nissan and Honda, with the result of the consideration, plan to establish, through a joint share transfer, a joint holding company that will be the parent company of both companies. This will be subject to approval at each company’s general meeting of shareholders and obtaining necessary approvals from relevant authorities for this business integration, based on the premise that Nissan’s turnaround actions are steadily executed. Both Nissan and Honda will be fully owned subsidiaries of the joint holding company.
Additionally, the companies plan to continue coexisting and developing the brands held by Honda and Nissan equally.
Shares of the newly established joint holding company under consideration are planned to be newly listed (technical listing) on the Prime Market of the Tokyo Stock Exchange (TSE). The listing is scheduled for August 2026.
With the listing of the joint holding company, both Nissan and Honda will become wholly owned subsidiaries of the joint holding company and will be scheduled to be delisted from the TSE. However, shareholders of both companies will continue to be able to trade shares of the joint holding company issued during this share transfer on the TSE.
The listing date of the joint holding company and the delisting date of both Nissan and Honda will be determined in accordance with the regulations of the TSE.
Regarding the organizational structure of the joint holding company, and both companies which will become wholly-owned subsidiaries of the joint holding company after the business integration, the optimal structure for realizing synergies, including the integration of R&D functions, purchasing functions, and manufacturing functions, will be discussed and considered within the integration preparatory committee, with the aim of establishing an organizational structure that enables efficient and highly competitive business operations after the business integration.
Published January 2025