Honda's U.S.-listed shares popped Monday morning after the Japanese automaker and Nissan announced plans to merge in 2026.

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.

The move would bring the two struggling car companies together in a bid to reclaim market share from rising domestic brands in China, the world's largest car market.