Nissan, Honda Shares React to Merger Speculation

Nissan shares surged 22% while Honda Motor stock slipped following media reports that the two Japanese automakers were potentially considering a merger.

According to a report in the Nikkei newspaper, Honda and Nissan are considering operating under a holding company, and soon will sign a memorandum of understanding.Honda and Nissan are considering operating under a holding company, and soon will sign a memorandum of understanding, according to a report in the. They also look to eventually bring Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, under the holding company, according to the report.

In a statement, Nissan said media reports that it is"considering a business integration" with Honda are not based on an announcement from our company. Nissan said it is considering various possibilities for future collaboration with Honda and Mitsubishi, but no decisions have been made. The combined Nissan-Honda-Mitsubishi enterprise would equate to more than 8 million vehicle sales annually, according to Nikkei. That would place the company among the world's largest automakers, but still below fellow Japanese automaker

The merger report follows the two Japanese automakers entering into a strategic partnership earlier this year on shared automotive components and software.Such a tie-up would be the largest automotive industry merger since Fiat Chrysler joined with France-based PSA Groupe to formFeeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weeklychicago news

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