Japanese automakers Nissan Motor Corp. and Honda Motor Co. confirmed Wednesday that they are discussing closer collaboration but denied reports they have decided on a merger. Nissan’s share price soared more than 22% in Tokyo after reports citing unnamed sources said it might merge with Honda to form the world’s third-largest automaking group. Honda’s share price fell as much as 3%.
The two companies announced in August that they planned to share components for electric vehicles like batteries and jointly research software for autonomous driving to adapt better to dramatic changes in the auto industry centered around electrification. A preliminary agreement between Honda, Japan's second-largest automaker, and Nissan, third largest, was announced in March. Trading in Nissan’s shares was suspended but then resumed after the companies jointly issued a statement saying they were “considering various possibilities for future collaboration, but no decisions have been made.” A merger could result in a behemoth worth about $55 billion based on the market capitalization of all three automakers. Joining forces would help the two companies gain larger scale to compete with Japan's market leader Toyota Motor Corp. and with Germany’s Volkswagen AG. The news comes as Honda announced plans to cut about 6% of its global work force, and reducing global production capacity by 20% after reporting a quarterly loss of 9.3 billion yen ($61 million)
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