Honda (HMC.US) and Nissan are reportedly going to announce the initiation of merger talks and plan to reach a final agreement by next June.

According to local media reports, it is expected that Honda Motor Co., Ltd. Sponsored ADR (HMC.US) and Nissan Motor will announce the start of business integration talks on Monday, with the two automakers hoping to survive in the rapidly changing industry landscape. Reports suggest that the two automakers may hold board meetings on Monday to discuss negotiations, followed by a joint press conference, with Nissan's alliance partner Mitsubishi Motors expected to attend as well. An anonymous source revealed that Honda and Nissan plan to reach a final agreement on the merger plan in June. The merger of these three Japanese brands will create the world's third largest automotive group, behind only Toyota Motor Corp. Sponsored ADR (TM.US) and Volkswagen (VWAGY.US), making it the largest industry reshaping deal since the establishment of Stellantis (STLA.US) in 2021. According to reports last week, Honda and Nissan have been exploring ways to strengthen their cooperation, including establishing a joint holding company, as they face increasing competition from Tesla, Inc. (TSLA.US) and Chinese rivals. Nissan announced a plan last month to cut 9,000 jobs and 20% of its global capacity after a sharp drop in sales in its key Chinese and American markets. Media reports on Saturday stated that the collaboration being discussed also includes Honda providing hybrid cars to Nissan, as well as jointly using Nissan's car assembly plant in the UK. Sources mentioned that Renault, Nissan's largest shareholder and a French automaker, is generally open to the deal and will study all the impacts of the merger. Furthermore, it was revealed by insiders that Foxconn has put aside its intention to acquire Nissan, while Nissan is currently in negotiations for a potential merger with Honda Motor Co., Ltd. Sponsored ADR. Insiders stated that Foxconn decided to pause the acquisition after meeting with representatives from Renault in France. Renault holds a 36% stake in Nissan and will have a say in any merger action.