Honda Motor Co. Ltd. (NYSE:HMC) CEO Toshihiro Mibe reportedly found it difficult to explain why its merger with Nissan Motor Co. Ltd. (OTC:NSANY) is justified.
What Happened: Mibe encountered a challenging moment when asked to explain the reasoning behind a possible merger with Nissan.
When asked why the Honda-Nissan merger makes business sense, Mibe hesitated before replying, "That's a difficult one," which drew laughter from the journalists present, according to a report by InsideEVs.
The merger discussions have generated both curiosity and skepticism worldwide, with many questioning the strategic advantages for the two automakers. Honda is grappling with challenges in the electric vehicle sector, particularly after its partnership with General Motors ended.
Despite the doubts, Julie Boote, an auto analyst with Pelham Smithers Associates, told Bloomberg that Honda must collaborate with another company to boost its EV and software capabilities.
Former Nissan CEO Carlos Ghosn criticized the merger, stating, "That means you're putting control above performance," according to a Bloomberg report.
Why It Matters: Honda and Nissan are planning to create a joint holding company, which will be listed on the Tokyo Stock Exchange by August 2026. This move could potentially lead to the delisting of both Honda and Nissan.
Earlier reports highlighted that the merger could involve Mitsubishi Motors, where Nissan holds a 24% stake.
If successful, the combined entity could achieve annual sales exceeding eight million vehicles, positioning it among the world's largest automakers, though still trailing behind Toyota Motor Corp. and Volkswagen AG.
Following the merger talks, Nissan's stock surged over 20%, while Honda's stock saw a slight decline.
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