Speculation about a potential Honda and Nissan merger began earlier this month, and the two companies confirmed the official start of talks Monday.

Japanese automakers Honda and Nissan have announced plans to join forces, forming world’s third-largest automaker by sales as the industry undergoes dramatic changes in its transition away from fossil fuels.

Renault SA is open to Nissan Motor Co. pursuing merger talks with Honda Motor Co. as the French automaker seeks way to insulate itself from the crisis plaguing its long-time alliance partner, according to people familiar with the situation.