Mitsubishi Motors (7211) Investor Update summary

Strategic rationale and integration framework

• Nissan and Honda signed an MOU to begin formal discussions on business integration, with Mitsubishi Motors joining as a potential participant and aiming to decide by January 2025.

• The integration aims to address rapid industry changes, focusing on electrification, vehicle intelligence, and leveraging combined resources for greater competitiveness and innovation.

• The plan includes forming a holding company via joint share transfer, with Honda initially nominating the majority of the board, and both brands maintained under the new structure.

• Expected synergies include platform standardization, R&D integration, manufacturing optimization, supply chain enhancements, operational efficiencies, and sales finance integration, aiming to deliver greater value to a broader customer base.

• The combined entity targets JPY 30 trillion in revenue and over JPY 3 trillion in operating profit, aiming to become a global leader in mobility solutions.

Timeline and conditions

• Definitive agreement targeted for June 2025, with holding company incorporation and Tokyo Stock Exchange listing expected by August 2026, subject to approvals.

• Share transfer ratios will be determined based on due diligence and market prices prior to the MOU announcement.

• Both Nissan and Honda must demonstrate strong, independent business foundations for integration to proceed; Nissan's turnaround and Honda's capital optimization are prerequisites.

• Honda announced a JPY 1.1 trillion share buyback to optimize capital and strengthen shareholder returns ahead of integration talks.

• Mitsubishi Motors will decide on participation after evaluating synergies and its unique strengths, especially in ASEAN and frame vehicles, with a decision expected by January 2025.

Stakeholder considerations and future outlook

• Integration is not about rescuing any party but about mutual growth, with both companies expected to stand on their own before merging.

• Employee and stakeholder buy-in is emphasized, with transparent communication and respect for each brand's identity.

• The integration is seen as a response to industry disruption from new entrants and technological shifts, aiming for long-term value creation and leadership in mobility.

• Ongoing partnerships with other automakers, such as Renault and GM, will continue and be evaluated for further synergies.

• The process is expected to be gradual, with visible results and value creation anticipated closer to 2030.