Honda Motor Company, Nissan Motor, and Mitsubishi Motors Corporation signed a memorandum of understanding (MoU) on Monday to explore the possibility of Mitsubishi Motors’ participation and synergy sharing in the business integration through the establishment of a joint holding company.

The MoU was signed between Nissan and Honda.

Nissan, Honda, and Mitsubishi Motors have reached a basic agreement to proceed with discussions based on the framework established in the MoU signed by Nissan and Honda on August 1, regarding the commencement of a strategic partnership focused on intelligence and electrification, the companies said.

Mitsubishi Motors has been participating in this framework, and the three companies have been proceeding with discussions, they said.

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Nissan and Honda will establish an integration preparatory committee to facilitate a smooth integration and will conduct focused discussions. Based on the committee’s discussions, as well as the results of due diligence, the companies will examine and analyse more specific synergies. Nissan and Honda aim to become a world-class mobility company with sales revenue exceeding 30 trillion yen and an operating profit of more than 3 trillion yen, the companies added.

The companies also anticipate that optimising their manufacturing plants and energy service facilities, combined with improved collaboration through the shared use of production lines, will result in a substantial improvement in capacity utilisation leading to a decrease in fixed costs.

The three companies have agreed to explore the possibility of achieving synergies at an increased level through Mitsubishi Motors’ participation or involvement in the business integration. Mitsubishi Motors aims to reach its conclusion by the end of January 2025 on the participation or involvement in the business integration between Nissan and Honda, the companies said.

“Nissan and Honda will start the discussion from today onwards with an aim to clarify the possibility of business integration by around the end of January in line with the consideration of Mitsubishi Motors,” Toshihiro Mibe, Director and Representative Executive Officer at Honda, said.

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The execution of a definitive agreement concerning the business integration (including the share transfer plan) is expected to be concluded by June 2025 and by August 2026, the companies expect for the share transfer.

“Honda and Nissan have begun considering a business integration, and will study the creation of significant synergies between the two companies in a wide range of fields. It is significant that Nissan’s partner, Mitsubishi Motors, is also involved in these discussions,” Makoto Uchida, Director, President, Chief Executive Officer and Representative Executive Officer, Nissan, said.

The company anticipates that if this integration comes to fruition, the new company would be able to deliver even greater value to a wider customer base, he said.

Honda and Nissan may file a registration statement on Form F-4 (“Form F-4”) with the US Securities and Exchange Commission (the “SEC”) in connection with the possible share transfer pertaining to the business integration between them (the “Share Transfer”), if it is conducted, the companies said.

“The study between Nissan and Honda about a business integration will accelerate synergy maximisation effects, bringing high value also to the collaborative businesses with Mitsubishi Motors. In order to realise synergies and to make the best use of each company’s strengths, we will also study the best form of cooperation,” Takao Kato, Director, Representative Executive Officer, President and CEO, Mitsubishi Motors, said.