Honda and Nissan Plan to Start Merger Talks, Report Says [Video]

Japanese automakers Honda (HMC) and Nissan (NSANY) plan to begin discussions about a potential merger, according to reports.

The companies intend to sign a memorandum of understanding to negotiate shared equity in a holding company that would house the combined automaker, according to Nikkei. report said. Such a deal would establish a bigger rival to fellow Japanese automaker Toyota (TM). The negotiations could also expand to include Mitsubishi Motors, which is partially backed by Nissan, the report said.

U.S.-traded shares of Nissan jumped Tuesday, while Honda’s rose slightly.

In March, Honda and Nissan established a partnership related to electric vehicles. Mitsubishi joined the collaboration in August.

“Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” spokespeople for the companies said Tuesday. “If there are any updates, we will inform our stakeholders at the appropriate time.”

Honda, Nissan, and Mitsubishi sold a combined 3.7 million vehicles in the six …