Key Takeaways Moody's gave a positive review of the potential merger of Honda and Nissan.Analyst Dean Enjo wrote that the deal would be "credit positive" if done correctly.Former Nissan CEO Carlos Ghosn warned Nissan would face "carnage" if the combination went through.

The proposed deal aims to unify operations under a joint holding company, led by Honda, while maintaining the distinct identities of each brand, according to Honda's president, Toshihiro Mibe. If finalized, the merger would position the combined entity to better compete with market leaders Toyota and Volkswagen.

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.