Reportedly, Honda and Nissan are set to commence merger negotiations.

• On Tuesday, the Nikkei newspaper reported that Nissan and Honda are planning to negotiate a merger in order to better compete in the rapidly changing automotive industry.
• According to the report, Honda and Nissan are considering forming a holding company and will soon sign a memorandum of understanding.
• During midday trading Tuesday, Honda's U.S.-traded shares rose approximately 2%, while Nissan's over-the-counter shares surged more than 11%.

Japanese automakers are reportedly planning to negotiate a merger to better compete in the global automotive industry, according to the Nikkei newspaper.

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

"Honda stated in an emailed statement that the reported content was not released by our company. As previously announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other's strengths. We will inform our stakeholders of any updates at an appropriate time."

In August, two Japanese automakers formed a strategic partnership and the resulting merger report details their 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.

Recently, automotive consultants and other experts have recommended an increase in mergers and acquisitions to reduce costs and improve competitiveness against expanding Chinese automakers and the U.S. all-electric vehicle leader.

During midday trading on Tuesday, Honda's U.S.-traded shares rose approximately 2%, while over-the-counter shares jumped more than 11%.

Nissan was not immediately available for CNBC's request for comment.

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