Shares of Honda and Nissan Surge after Their Merger Talks Became Public
Go Wire
December 24, 2024
GoGPT Summarizes Articles
Honda Motor's stock $HMC (TYO: 7267) surges in Japan's market on Tuesday (Dec 24) following the company's announcement of a merger discussion with peer Nissan Motor (OTC: NSANY) (TYO: 7201). The latter's shares also rise sharply on Tuesday.
Honda and Nissan announced on Monday (Dec. 23) that they were talking about a prospective consolidation deal. Mitsubishi Motors Corporation (TYO: 7211), of which Nissan owns a 34% share, is also considering joining the merger. Based on the individual market values, their combined entity could be worth more than $50 billion. Based on sales, the deal is expected to produce the world's third-largest automaker behind Toyota Motor $TM and Volkswagen (ETR: VOWG).
The merger is Honda and Nissan's solution to sales challenges in their major markets. In November, Nissan planned layoffs and maximized output cuts due to sharp sales declines in key markets such as China and the US. Similarly, falling sales in China contributed to Honda's disappointing earnings report.
The chief executives of the two companies said on Monday that through the merger, the companies intended to achieve joint sales of $191 billion and operating profit of over 3 trillion yen. The merger discussions are scheduled to end by June 2025 and a holding company is planned to be established by August 2026, with both companies' shares being delisted.
During today's trading hours in Japan's market, Honda jumps 12.77%, benefiting from the merger deal and a $7 billion share buyback. Likewise, Nissan soars 7.04%.
#$Honda Motor Co. Ltd. American Depositary Share each representing three (3) shares of Common Stock(HMC)#$Toyota Motor Corporation American Depositary Shares (Each representing ten Ordinary Shares)(TM)