TOKYO (AP) — Japanese automakers Honda and Nissan have announced plans to work toward a merger that would form the world’s third-largest automaker by sales, as the industry undergoes dramatic changes in its transition away from fossil fuels.

Honda Motor Co. sketched plans for a drawn-out deal that amounts to an acquisition of Nissan Motor Co., as Japan’s automakers struggle to keep up in an increasingly competitive global car industry.The two announced a tentative agreement Monday to set up a joint holding company that will aim to list shares in August 2026.