Nissan will be the victim of cost-cutting “carnage” if it combines forces with Japanese peer Honda, former Nissan CEO Carlos Ghosn told CNBC on Tuesday.

Moody's gave a positive review of the potential merger of Honda and Nissan, but former Nissan CEO Carlos Ghosn warned his old employer would face "carnage" if the combination went through.

Japanese automakers Honda and Nissan have announced plans to work toward a merger that would form the world’s third-largest automaker by sales, as the industry undergoes dramatic changes in its transition away from fossil fuels.