Nissan's stock price rises 22% following rumors of a possible merger with Honda.

• Following media reports of potential merger talks, Nissan's stock surged 22% while Honda Motor's stock slipped.
• A report in the Nikkei newspaper states that Honda and Nissan are considering forming a holding company and will soon sign a memorandum of understanding.

On Wednesday, shares of increased after a news report emerged that the Japanese car manufacturer is considering a merger with .

While Honda shares declined by 1.2%, Nissan shares rose by 22%.

According to a report in the Nikkei newspaper, Honda and Nissan are considering forming a holding company and bringing Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, under the holding company. They plan to sign a memorandum of understanding soon.

Nissan stated that media reports suggesting a business integration with Honda are not accurate, as no official announcement has been made. Nissan is exploring various possibilities for future collaboration with Honda and Mitsubishi, but no decisions have been made.

According to Nikkei, the combined sales of Nissan, Honda, and Mitsubishi would surpass 8 million vehicles annually, making the company one of the largest automakers globally, but still falling short of Toyota Motor's 11.2 million sales in 2023 and Volkswagen's 9.2 million vehicles sold last year.

Earlier this year, two Japanese automakers formed a strategic partnership and now a merger report has been released on shared automotive components and software.

The largest automotive industry merger since Fiat Chrysler joined with France-based PSA Groupe to form Stellantis in January 2021 would be such a tie-up.

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- Michael Wayland and Hui Jie contributed to this report.