Honda Motor Co., Ltd. and Nissan Motor Co., Ltd. have agreed to begin discussions and consideration toward a business integration and have resolved at the boards of directors of each of the Companies to sign a memorandum of understanding regarding the consideration of the Business Integration, which has been duly executed. As the Companies engage in their respective businesses to address social challenges, it is essential to strengthen areas such as environmental technologies, electrification technologies, and software development to further accelerate their efforts toward achieving a carbon-neutral society and a zero-traffic fatalities society, the Companies signed a memorandum of understanding on March 15, 2024 regarding a strategic partnership for the era of vehicle intelligence and electrification. Furthermore, on August 1, 2024 the Companies signed a further memorandum of understanding to deepen the framework of the strategic partnership.

The Companies also announced that they had agreed to carry out joint research in fundamental technologies in the area of platforms for next- generation software-defined vehicles (SDVs), particularly in the areas crucial for intelligence and electrification, to advance focused discussions toward more concrete collaboration. Throughout the process, the Companies have engaged in discussions in consideration of various possibilities and options. At the same time, the business environment for the Companies and the wider automotive industry has rapidly changed and the speed of technological innovation has continued to accelerate.

Purpose of the Business Integration: If the Business Integration can be realized, the Companies can aim to integrate their respective management resources such as knowledge, human resources, and technologies; create deeper synergies; enhance the ability to respond to market changes; and expect to improve mid- to long- term corporate value. Additionally, the Companies can aim to further contribute to the development of Japan's industrial base as a "leading global mobility company" by integrating the Companies' four- wheel-vehicle and Honda's motorcycle and power products businesses as well as other businesses, including aircraft, continue to make the brands of the Companies more attractive and deliver more attractive and innovative products and services to customers worldwide. Potential Synergies from the Business Integration: The Companies will aim to become a world-class mobility company with sales revenue exceeding JPY 30 trillion and an operating profit of more than JPY 3 trillion by swiftly realizing synergy effects between the Companies resulting from the Business Integration.

The potential synergies expected at this stage are as follows. Going forward, the Companies will examine and analyze more specific synergies based on discussions within the integration preparatory committee to be established by the Companies and the results of due diligence to be conducted in the future. Scale Advantages by Standardizing Vehicle Platforms: By standardizing the vehicle platforms of the Companies across various product segments, the Companies expect to create stronger products, reduce costs, enhance development efficiencies, and improve investment efficiencies through standardized production processes.

The integration is projected to increase sales and operational volumes, allowing the Companies to reduce development costs per vehicle, including for future digital services, while maximizing profits. By accelerating the mutual complementation of their global vehicle offerings - including ICE (internal combustion engine), HEV (hybrid), PHEV (plug-in hybrid), and EV (electric vehicles) models - the Companies will be better positioned to meet diverse customer needs around the world and deliver optimal products, leading to improved customer satisfaction. Enhancement of Development Capabilities and Cost Synergies through the Integration of R&D Functions: The Companies have started joint research in fundamental technologies in the area of vehicle platforms for next-generation SDVs, which is the cornerstone of the field of intelligence.

The Companies are progressing efforts towards standardizing specifications and mutual supply of key components such as batteries, which are crucial for EVs, and e- Axle, which is expected to be equipped in next-generation EVs. After the realization of Business Integration, the Companies will encompass more integrated collaboration across all R&D functions, including fundamental research and vehicle application technology research. This approach is expected to enable the Companies to efficiently and swiftly enhance their technological expertise, achieving both improvements in development capabilities and reductions in development costs through the integration of overlapping functions.

Optimizing Manufacturing System and Facilities: The Companies anticipate that optimizing their manufacturing plants and energy service facilities, combined with improved collaboration through the shared use of production lines, will result in a substantial improvement in capacity utilization leading to a decrease in fixed costs. Strengthening Competitiveness Advantage across the Supply Chain through the Integration of Purchasing Functions: To fully leverage the synergies from optimizing development and production capacity, the Companies intend to boost their competitiveness by improving and streamlining purchasing operations and source common parts from the same the supply chain and in collaboration with business partners. The Companies plan to establish, through a joint share transfer, a joint holding company that will be the parent company of both companies.

This will be subject to approval at each company's general meeting of shareholders and obtaining necessary approvals from relevant authorities for the Business Integration, based on the result of the consideration of the Business Integration and the premise that Nissan's turnaround actions are steadily executed. The Companies will be fully owned subsidiaries of the joint holding company. However, should any procedural necessities arise regarding the Share Transfer or for any other reasons, the Companies may consult and agree to modify the above structure in the future.

Shares of the newly established joint holding company under consideration are planned to be newly listed (technical listing) on the Prime Market of the Tokyo Stock Exchange ("TSE"). The listing is scheduled for August 2026. In addition, the Share Transfer will result in the Companies becoming wholly-owned subsidiaries of the joint holding company, and therefore the Companies will become wholly owned subsidiaries of the joint holding company and will be scheduled to be delisted from the TSE.

However, shareholders of the Companies will continue to be able to trade shares of the joint holding company issued during this share transfer on the TSE.