Tue Dec 24 02:02:18 UTC 2024: ## Honda Shares Surge After $7 Billion Buyback Announcement and Nissan Merger Talks
**Tokyo, Japan** – Honda Motor Co. shares jumped over 16% on Tuesday following the announcement of a massive $7 billion (1.1 trillion yen) share buyback program. This move comes on the heels of a Monday agreement with struggling rival Nissan to explore a potential merger, aiming to bolster their competitiveness against Chinese electric vehicle (EV) manufacturers and Tesla.
The buyback, representing 23.7% of outstanding shares, is intended to optimize Honda’s capital structure, according to CEO Toshihiro Mibe. While acknowledging it’s not a complete equity adjustment, Mibe stated it’s the largest buyback currently feasible, assuring investors of Honda’s strong financial foundation.
The proposed collaboration between Honda and Nissan would create the world’s third-largest automaker, focusing on accelerating development in electric vehicles and autonomous driving technology. Mibe stressed that the partnership is not a bailout for Nissan, which recently announced significant job cuts and a dramatic decline in first-half profits.
The partnership, also involving Nissan’s majority-owned subsidiary Mitsubishi Motors, would be structured under a new holding company. The move comes amidst a challenging global automotive landscape marked by weak consumer spending and intense competition, particularly from rapidly growing Chinese EV makers like BYD who are dominating the burgeoning Chinese market.
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