Honda and Nissan have officially confirmed rumors that they're pursuing a merger, the companies wrote in a joint press release. Each would continue to operate under its own brand, but with a new joint holding company as parent.

Facing extreme competitive pressure from the rise of Chinese EV makers, the Nos. 2 and 3 Japanese automakers turn to each other to build strength.

Both companies are grappling with intense global competition in the electric vehicle market from the likes of Tesla and China’s BYD.