Japanese automakers Nissan and Honda have announced plans for a merger that would catapult them to a top position in an industry that's in flux as it transitions away from its reliance on fossil fuels.

The new entity will have a combined market cap of $50 billion. It is expected to have a revenue of $191 billion and profit of $19 billion. Mitsubishi Motors Corp., a smaller player which has Nissan as a majority shareholder,

Japan's Honda and Nissan said Monday they had embarked on formal merger talks that would create the third-largest car manufacturer globally with sales of as much as $191.4 billion and more than $19 billion profit.