A $5 billion agreement between Honda Motor Corp. and BMW and a German luxury automaker has been reached, according to people familiar with the matter.
The companies announced the deal in a joint statement on Tuesday.
The agreement could help Honda move ahead with its ambitious plans to invest $2.7 trillion in new vehicles and build the world’s biggest automaker.
The deal also includes an agreement for Honda to acquire Mercedes-AMG, the German automaker’s luxury division.
The deal was first reported by Reuters.
Honda also said on Monday that it had secured a $1.5-billion deal to purchase an American arm of German automakers Mercedes-Golf, the second-biggest German carmaker behind BMW.
The new BMW-Honda partnership could be a major boost to the global market for luxury brands.
In the United States, BMW’s luxury brands include Audi, Porsche and Audi Sport, and Honda has been a major player in the luxury market in the United Kingdom and the United Arab Emirates.
Honda is the world market leader in electric vehicles, with more than 2.3 million vehicles in production.