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.

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

The Japanese car giants will merge to create the world’s third-largest automotive group by 2026, as the two companies struggle to keep up with global competitors.