The proposed deal aims to unify operations under a joint holding company, led by Honda, while maintaining the distinct identities of each brand, according to Honda's president, Toshihiro Mibe. If finalized, the merger would position the combined entity to better compete with market leaders Toyota and Volkswagen.

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Honda and Nissan signed a basic agreement for merger talks, according to a joint media briefing held in Tokyo. Honda also said it will buy back as much as $7 billion of its own shares.