Honda and Nissan signed a Memorandum of Understanding on December 23, 2024, to discuss a merger. The plan was to establish a new holding company to integrate the two large Japanese automakers and go operational as early as 2026. However, shortly after the MoU was signed, sources close to the matter signaled the deal was doomed to fail. It's now official—the merger has been canceled.
Honda and Nissan issued an identical press release stating the merger talks are now over. Those reports about Honda's desire to turn Nissan into a subsidiary are confirmed in the official announcement as one of the "various options" that were analyzed during the discussions:
“Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU, to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.”
The separate MoU signed by Honda, Nissan, and Mitsubishi on December 23, 2024, has also been terminated. The other document mentioned how Mitsubishi could participate in the Honda-Nissan merger. The three automakers still want to work together on electrified vehicles, but a merger is out of the question.
Various reports emerged while the merger was still being negotiated. In addition to Honda's desire to turn Nissan into a subsidiary, Honda apparently didn't want Renault involved, asking Nissan to buy back the shares owned by the French company. Additionally, Mitsubishi allegedly shut down the idea of becoming the third member of the merger, deciding instead to remain independent.
Reuters, citing insiders, reports that the deal fell through mainly because Nissan wanted "near-equal treatment" during the merger talks, whereas Honda wished to call the shots. Additionally, Honda was unhappy with how slowly Nissan was restructuring its business.
What's next? The rumor mill claims Nissan is still seeking a partner. Taiwanese electronics maker Foxconn is still interested in collaborating, but the iPhone maker doesn't want to buy the company outright. In the meantime, Nissan is pressing ahead with a restructuring plan that was announced last November. It involves eliminating 9,000 jobs and reducing global production capacity by a fifth.
Sources: Honda, Nissan, Mitsubishi
