Japanese automakers Nissan and Honda are expected to announce plans on a merger that would catapult them to a top position in an industry in the midst of tectonic shifts as it transitions away from reliance on fossil fuels.

Honda and Nissan are likely to unveil on Monday a pact to explore a merger by setting up a joint holding company, a person familiar with the matter told Reuters, with the aim of reaching a deal by June 2025.

Honda Motor Co. and Nissan Motor Co. are looking to finalize a merger agreement as soon as June after negotiations begin later Monday, and may combine in 2026, Japanese media reported, citing unidentified sources.