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.

Japan’s second- and third-largest automakers hope the $50 billion deal would help them catch up with Tesla and China’s BYD in electric vehicles and advanced software.

Nissan Motor CEO Makoto Uchida (L), Honda Motor CEO Toshihiro Mibe (C) and Mitsubishi Motors President Takao Kato (R) pose during a photo session to announce merger talks. Honda’s U.S. shares are soaring.