Nissan Motor shares surged Wednesday following a media report that the Japanese automaker is seeking to merge with Honda.

Nissan shares had been final buying and selling up 20%, whereas Honda shares slipped 2%.

Honda and Nissan are contemplating working below a holding firm, and shortly will signal a memorandum of understanding, based on a report within the Nikkei newspaper. In addition they look to ultimately deliver Mitsubishi Motors, by which Nissan is the highest shareholder with a 24% stake, below the holding firm, based on the report.

The mixed Nissan-Honda-Mitsubishi enterprise would equate to greater than eight million automobile gross sales yearly, based on Nikkei. That might place the corporate among the many world’s largest automakers, however nonetheless under fellow Japanese automaker Toyota Motor, at 11.2 million in 2023, in addition to German automaker Volkswagen, which final 12 months reported gross sales of 9.2 million autos.

The merger report follows the 2 Japanese automakers getting into right into a strategic partnership earlier this 12 months on shared automotive elements and software program.

Such a tie-up can be the biggest automotive trade merger since Fiat Chrysler joined with France-based PSA Groupe to kind Stellantis in January 2021.

It is a breaking information story. Please refresh for updates.

– Michael Wayland contributed to this report.