Nissan shares clocked up their biggest gain in nearly 40 years after it entered merger talks with Japanese rival Honda.
A deal that could also include Mitsubishi Motors, in which Nissan is the top shareholder with a 24 per cent stake, and would create the world’s third-largest carmaker with 8m sales a year – behind Toyota (11.2m) and German giant Volkswagen (9.2m).
Nissan shares jumped 24 per cent but remain down 25 per cent this year. Honda fell 3 per cent.
The talks come as carmakers face fierce competition from fast-growing Chinese rivals making electric vehicles.
Merger talks: Nissan and Honda are in exploratory discussions about a deal that could also include Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake
Russ Bell, investment director at AJ Bell said the China threat was one of the ‘major issues facing the industry’.
But a deal may raise anxieties in the UK, where Nissan has warned the industry was at ‘crisis point’.
It employs 7,000 workers here and supports 30,000 in the supply chain.
Nissan and Honda responded almost identically to a request for comment, each saying it is ‘considering various possibilities for future collaborations’ but ‘no decisions have been made’.
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