While Honda and Nissan were in talks to merge for months, now that won’t happen
Nissan is set to abandon merger talks with rival Honda, according to sources close to the matter. This move effectively ends a proposed $60 billion-plus tie-up that would have created the world’s third-largest automaker, raising questions about how Nissan will navigate its ongoing turnaround efforts alone.
The decision comes after growing differences between the two Japanese giants, complicating what was once seen as a promising collaboration. Earlier reports from people familiar with the discussions revealed that the talks have faltered due to diverging views on the structure of the potential deal.
Moreover, Honda’s proposal to turn Nissan into a subsidiary was a key point of contention, as it deviated from the initial idea of a merger of equals. Nissan, understandably, rejected this notion, which led to the collapse of the talks. In response to the news, Nissan’s shares dropped by more than 4 percent on the Tokyo Stock Exchange, with trading briefly suspended.
Meanwhile, Honda’s shares saw a significant increase, rising over 8 percent, suggesting investor relief at the conclusion of the talks. The failure of the merger talks raises new concerns about Nissan’s ability to weather its ongoing crisis without external support. The company is currently in the midst of a restructuring plan, which includes plans to cut 9,000 jobs and reduce global production capacity by 20 percent.
As Nissan struggles to regain its footing, questions abound about how it can achieve a successful turnaround on its own in the face of intensifying competition in the auto industry, particularly from China’s BYD and other electric vehicle (EV) manufacturers.
On top of that, Honda, which is Japan’s second-largest automaker behind Toyota, had expressed interest in a merger with Nissan to strengthen its position in an industry increasingly threatened by the rise of EVs. However, concerns over Nissan’s progress in its recovery efforts, coupled with potential U.S. tariffs, seem to have prompted Honda to reconsider the deal.
Nissan’s turnaround has been further complicated by its failure to fully recover from the crisis following the 2018 arrest of former chairman Carlos Ghosn. The company has struggled to regain momentum, especially in the EV market, and now faces additional uncertainty. Analysts suggest that without the merger, Nissan may have a more difficult time moving forward.
We got all this from the New York Post and their full article is linked here. Thank you New York Post for the information and images.
