Japanese automakers Nissan and Honda on Monday introduced they’d entered into official talks to merge and create the world’s third-largest automaker by sales.
The proposed deal was first reported by Japan’s Nikkei newspaper on Dec. 17.
Both firms are grappling with intense international competitors within the electrical automobile market from the likes of Tesla and China’s BYD.
Nissan shares spiked following the preliminary report. Analysts say the potential tie-up is a results of financial underperformance on the firm and of the restructure of its longstanding partnership with France’s Renault.
In its most up-to-date quarterly outcomes, Nissan said it might reduce 9,000 jobs and cut back international manufacturing capability by a fifth.
The automaker has “been struggling out there, it’s been struggling at dwelling, it doesn’t have the best product line-up,” Peter Wells, professor of enterprise and sustainability at Cardiff Business School’s Centre for Automotive Industry Research, informed CNBC’s “Street Signs Europe” final week.
“There are so many warning indicators, so many crimson flags round Nissan in the meanwhile that one thing needed to occur. Whether that is the reply is one other query,” Wells added.
This is a breaking information story and will likely be up to date shortly.
— CNBC’s Sam Meredith contributed to this story.
