- Honda and Nissan may be about to walk away from a planned merger
- Reports out of Japan claim Honda wants increased control over Nissan
- The merger would be worth $58 billion and would create the world’s fourth-largest automaker
A decision on the merger between Honda and Nissan proposed by the automakers last December was anticipated to arrive in January, but now there are reports that no deal might happen at all.
Citing several sources, Japan’s Asahi Shimbun reported on Wednesday that the boards of Honda and Nissan plan to meet soon to formalize the termination of the merger.
According to the report, executives at Honda were frustrated by Nissan’s slow progress, including in its restructuring plan, which calls for 9,000 job cuts and a 20% reduction in production, and proposed taking more control of Nissan and potentially even turning it into a subsidiary. Such a proposal deviates from the initial one, in which Nissan would retain its decision-making powers.
The Financial Times reported on Wednesday that Nissan’s poor financial performance has caused its market capitalization to shrink to just one-fifth of Honda’s, shifting the balance of power in the negotiations.
The merger, if it were to go ahead, would be worth an estimated $58 billion and would create the world’s fourth-largest automaker.
Mitsubishi, which is already partially owned by Nissan, was also invited to join the merger, with the shares of all three automakers to be transferred into a joint holding company. However, reports from January claimed Mitsubishi wanted to sit out the merger due to its smaller relative size and the lack of independence it would have within the merged entity.
Even without the merger, Honda and Nissan may deepen their collaboration. The automakers are already partnered in some areas. Honda and Nissan have been collaborating on EV and software development since early last year, and Mitsubishi joined the partnership last summer. Nissan and Mitsubishi also already share vehicle platforms and technology via their existing alliance, which also includes Renault. Mitsubishi has also collaborated with Honda in the past, most recently in battery leasing for EVs through a joint venture called Altna.
