Nissan ends merger talks with Honda
Nissan decides to walk away from Honda merger discussions
Nissan has officially decided to withdraw from merger discussions with Honda after the latter proposed making Nissan a subsidiary.
According to a source familiar with the matter, Nissan CEO Makoto Uchida personally informed Honda CEO Toshihiro Mibe of this decision on Thursday. The source, speaking anonymously due to the confidential nature of the talks, confirmed that Nissan leadership concluded that negotiations could not continue under Honda’s terms, reports Reuters.
Original Merger Plans and Growing Disagreements
The two automakers had initially signed a memorandum of understanding (MOU) in December, intending to explore the possibility of merging under a holding company.
If successful, this move would have created the world’s third-largest automaker, helping both companies remain competitive in an industry facing significant challenges, such as the shift toward electric vehicles and autonomous driving technologies. However, the discussions soon encountered obstacles as differences between the two companies became more pronounced.
According to multiple sources, the biggest point of contention was Honda’s insistence on making Nissan a subsidiary, which Nissan saw as an unfavorable condition. While Honda viewed this as a necessary structure for a successful integration, Nissan leadership firmly opposed the idea, leading to an impasse.
Formal Decision Expected Soon
Nissan is expected to officially withdraw from the MOU at an upcoming board meeting before its third-quarter earnings announcement next week. Meanwhile, Honda has maintained its stance that an integration will not move forward unless Nissan agrees to become a subsidiary, as reported by Japanese public broadcaster NHK.
The collapse of the talks raises questions about Nissan’s ability to navigate its financial and operational difficulties independently. The company is currently undergoing a major restructuring plan, which includes laying off 9,000 employees and reducing its global production capacity by 20%. Without a partnership, Nissan may need to find alternative strategies to strengthen its market position.
Following the announcement, Nissan’s stock rose 7.6% on Thursday afternoon, while Honda’s shares fell by 3.5%, reversing the trends seen the previous day. The failure of the merger could push both automakers to reassess their long-term strategies as they compete in an increasingly challenging global automotive industry.
Additionally, Chery Holding Group Co., one of China’s leading automotive companies, has enlisted JPMorgan Chase & Co. to support the potential initial public offering (IPO) of its automotive unit in Hong Kong.
