Nissan and Honda officials announce plans to merge and create world's No. 3 automaker

(23 Dec 2024)
RESTRICTION SUMMARY:

ASSOCIATED PRESS
Tokyo, Japan - 23 December 2024
1. Various of Nissan CEO Uchida Makoto and Honda CEO Mibe Toshihiro walking onto stage
2. SOUNDBITE (Japanese) Mibe Toshihiro, Honda CEO:
++PART OVERLAID BY SHOTS 1, 3 & 4++
“The top management of the two companies have further deepened their understanding that, when looking ahead to the tectonic changes in the automotive industry that are already emerging, the future of mobility will not be differentiated by conventional hardware, but will be transformed by intelligent and electrified mobility. We have come to the realisation that in order for both parties to be leaders in this mobility transformation, it is necessary to make a bolder change than a collaboration in specific areas.”
3. News conference taking place
4. Pan of logos of Nissan and Honda
5. SOUNDBITE (Japanese) Uchida Makoto, Nissan CEO:
++PART OVERLAID BY SHOTS 4 & 6++
"Today, we have made the important decision to take a step forward into the future by going beyond our previous collaboration framework and starting discussions toward management integration.”
6. Makoto and Toshihiro
STORYLINE:
Japanese automakers Honda and Nissan have announced plans to work toward a merger, forming the world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

The two companies said they had signed a memorandum of understanding on Monday and that smaller Nissan alliance member Mitsubishi Motors also had agreed to join the talks on integrating their businesses.

Honda's president, Toshihiro Mibe, said Honda and Nissan will pursue unifying their operations under a joint holding company.

Honda will initially lead the new management, retaining the principles and brands of each company.

The aim is to have a formal merger agreement by June and to complete the deal and list the holding company on the Tokyo Stock Exchange by August 2026, he said.

No dollar value was given and the formal talks are just starting, Mibe said.

Automakers in Japan have lagged behind their big rivals in electric vehicles and are trying to cut costs and make up for lost time.

A merger could result in a behemoth worth more than $50 billion based on the market capitalization of all three automakers.

Together, Honda, Nissan and Mitsubishi would gain scale to compete with Toyota Motor Corp. and with Germany’s Volkswagen AG.

Nissan has struggled following a scandal that began with the arrest of its former chairman Carlos Ghosn in late 2018 on charges of fraud and misuse of company assets, allegations that he denies. He eventually was released on bail and fled to Lebanon.

The company recently reshuffled its management and Makoto Uchida, its chief executive, took a 50% pay cut to take responsibility for the financial woes, saying Nissan needed to become more efficient and respond better to market tastes, rising costs and other global changes.

Nissan’s share price also has fallen to the point where it is considered something of a bargain and jumped more than 20% after news of the possible merger broke last week.

Honda's shares gained 3.8%.

AP Video shot by Ayaka McGill

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[chrispine]

If well managed this could be ground breaking