Financially pressured Nissan's stock surges 24 percent on the Tokyo Stock Exchange following the reports – the largest price increase ever for the stock in a single trading day.
Even Mitsubishi's stock surges, up 17 percent, as Nissan has a controlling stake in the company. French Renault's stock also rises, up over 5 percent, as Renault is a minority owner of Nissan.
However, Honda's stock falls by over 3 percent.
A fifth of Toyota's value
Both Nissan and Honda have confirmed that talks are underway, including discussions about a merger. According to Japanese media, some form of official statement about the plans is expected in the beginning of next week.
"We are discussing opportunities for cooperation between Honda and Nissan, in many areas and different sectors," a Honda spokesperson tells AFP, but emphasizes that nothing is decided.
A merger of Honda and Nissan would – if Nissan-controlled Mitsubishi is included – create a vehicle conglomerate with a market value of around 57 billion dollars. This is approximately a fifth of Japanese Toyota Motor's market value of 276 billion.
Tesla's market value is currently around 1,400 billion dollars for comparison.
Honda and Nissan – which in recent years have distanced themselves from previous collaborations with American General Motors (GM) and French Renault – already made it clear in March this year that they want to cooperate more and have announced several joint projects since then.
Foxconn wants a controlling stake
The Japanese newspaper Nikkei reports that what is now being discussed is a setup where a new holding company would be created, which would own both companies. However, it could also be some kind of acquisition or merger.
Taiwanese Foxconn has simultaneously approached Nissan Motor with an offer to buy a controlling stake in the company, reports news agency Bloomberg, citing a source with insight into the process.
The reports were first reported by the Japanese newspaper Diamond Online.
Foxconn – formally Hon Hai Precision Industry Co – is best known as the manufacturer of Apple's iPhone phones but has invested heavily in factories for contract manufacturing of electric cars.
