Japanese automakers Honda and Nissan announced on Monday the launch of business merger negotiations, targeting a final agreement by June next year.

The two companies plan to establish a new holding company that will bring Honda and Nissan under its umbrella as subsidiaries, in a bid to cope with fierce competition in the global electric vehicle market.

The holding company, which will be more than half-owned by Honda, is scheduled to go public in August 2026, with Honda and Nissan delisted.

And more than half of the holding company's board of directors will be nominated by Honda.

Honda and Nissan will set up an integration preparation committee to begin in-depth discussions to ensure smooth business integration.

Meanwhile, Mitsubishi Motors, which has a corporate alliance with Nissan, will consider the possibility of joining the merger.

Through the merger, Honda and Nissan seek to achieve overall annual sales of more than 30 trillion yen and annual operating profit of more than 3 trillion yen.