Honda shares post best day in 16 years on share buyback plan, Nissan deal | Wilnesh News

Japanese automaker stocks Honda After that, they’re on track to have their best day in 16 years Announced buybacks of up to 1.1 trillion yen ($7 billion) Its shares sold off on Monday amid merger talks. Nissan.

Nissan Honda and Honda said they have begun formal talks about a merger that could make them the world’s third-largest automaker by sales.

Honda also announced that it will repurchase 24% of its issued shares by December 23 next year. Its shares were last up 15.51%, which would mark their best day since October 2008 if gains remain unchanged. Nissan shares fell more than 1%.

Honda CEO Mibe Toshihiro Mibe said the Honda-Nissan deal will focus on sharing knowledge and resources, achieving economies of scale and creating synergies. Honda and Nissan will establish a holding company as the parent company and list the shares on the Tokyo Stock Exchange.

“The two companies operate in the same market, their brand images are very similar and their products are very similar,” Alagan Mobility Solutions chairman Hakan Dogu told CNBC on Tuesday.

“The new management faces the huge challenge of differentiating the product range and expanding the business,” he added.

Discussions will end in June 2025.

Nissan’s strategic partner Mitsubishi has been given the opportunity to join the new group, and a decision is expected to be made by the end of January 2025.

Honda report Operating profit for the full year to March 2024 was 1.382 trillion yen, compared with Nissan’s 568.7 billion yen. The total value of these automakers will be close to $54 billion, with Honda’s market capitalization contributing $43 billion.

Analysts say the potential merger stems from Nissan’s financial woes and a shakeup of its long-standing relationship with France’s Renault.

Nissan announced in its latest quarterly report that it plans to lay off 9,000 employees and cut global production capacity by 20%.

—CNBC’s Jenni Reid contributed to this report.