Moody’s Gives Thumbs Up to Possible Honda-Nissan Merger | Global News Avenue

American Depository Receipts (ADRs) or Honda (HamakaThe gains came on Tuesday after Moody’s gave a positive outlook to a potential merger between the automaker and Japanese rival Nissan.

two companies Confirmed Yesterday, they planned to join forces as they face rising costs and competition, especially in the race to make cost-effective electric vehicles (EVs) amid weakening demand and growing market share from Chinese rivals.

Moody’s says merger will be ‘credit positive’

Moody’s said the merger “will be credit positive if successfully executed.” Bloomberg Nissan Motor Co. in particular will benefit because it has weaker debt metrics than Honda Motor Co., Moody’s Vice President and Senior Analyst Dean Enjo and others wrote.

Njo added that the integration would be beneficial as the two automakers would share Research and Development (R&D) cost.

However, the former Nissan Chief Executive Officer (CEO) Carlos Ghosn has warned it will face a “carnage” of cost-cutting as the two companies will “completely duplicate themselves”. he told CNBC If the two companies merged, “Honda would be dominant” and Nissan would be a “secondary partner.”

Although Honda’s ADR has risen sharply over the past two trading sessions on the news, it is still down about 13% year to date.