The planned merger between Nissan and Honda, two of Japan's largest automakers, appears to be dissolving after months of negotiations. Disagreements on the structure and control of the merged entity, particularly concerning market capitalization and the proposed establishment of a joint holding company with Honda taking a leading role, led to Nissan's decision to withdraw from the deal.
Nissan is set to abandon merger talks with rival Honda , according to reports. The two Japanese automotive giants had signed a Memorandum of Understanding last December to explore a potential merger, aiming to finalize an agreement by June 2025. The proposed merger would have involved the two brands retaining their separate identities while collaborating on shared platforms, powertrains, and production operations.
This would have resulted in the creation of one of the world's largest automobile companies. However, leading Japanese newspaper Nikkei, which initially revealed details of the negotiations last year, now reports that Nissan will be withdrawing from the deal due to escalating disagreements between the two companies regarding the structure and implementation of the merger. Recent reports in The Financial Times suggest that Nissan executives were angered by an unexpected proposal from Honda that deviated from the initial plan for a merger of equals. Honda reportedly proposed the formation of a joint holding company, with Nissan effectively becoming a wholly owned subsidiary of Honda. Nissan sources, citing the Financial Times, claim that this proposal was presented as a non-negotiable ultimatum. The proposed shift in control is believed to stem from Honda's higher market capitalization, estimated at around £31 billion, compared to Nissan's £8 billion valuation. This disparity in market value is thought to have prompted Honda to seek a dominant position within the merger, rather than the initially envisioned partnership of equals. French automaker Renault, which currently holds a 36 percent stake in Nissan, reportedly urged its Alliance partner to secure a more favorable deal if Honda were to assume a leading role in any potential consolidation. Following the Nikkei report, Nissan's share price plunged by over four percent on the Tokyo Stock Exchange, while Honda's share price rose by approximately eight percent. Both Nissan and Honda issued separate statements to Reuters denying the accuracy of the Nikkei report, asserting that it was not based on any official announcements from the companies. They maintained that their aim was to finalize a definitive future direction by mid-February
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