The major car companies are merging.

According to a report by the Japanese broadcasting organization NHK, which is based on an unnamed source, Honda Motor Co. and Nissan Motor Co. aim to finalize an agreement for the merger of the two companies in June after starting talks on Monday.

It was stated that both automakers would hold board meetings on Monday and then hold a press briefing.

SALES HAVE DROPPED, MERGER BECAME NECESSARY

The two companies were considering a capital merger or the establishment of a holding company, particularly due to Nissan's need for a financial turnaround. Falling sales and profits in the U.S. and China forced the company to lay off workers, reduce production capacity, and cut its annual profit outlook by 70 percent.

The talks initially became complicated when the Taiwanese manufacturer Hon Hai Precision Industry Co., also known as Foxconn, expressed interest in acquiring Nissan. However, a person familiar with the matter stated last week that the iPhone maker has paused its search for now to see how the discussions between the two Japanese companies develop.