The Nissan-Honda merger saga continues with a new episode that takes an interesting twist. Although an official announcement has yet to be made, multiple reports have stated that the plan to form a new holding company has been scrapped. Reuters cites people familiar with the matter as claiming Nissan CEO Makoto Uchida has already informed his Honda counterpart, Toshihiro Mibe, that he is ending negotiations regarding the much-debated merger.
But that's not all. Bloomberg has it on good authority that Nissan is already looking ahead and seeking a different partner after the allegedly failed discussions with Honda. Nissan prefers to team up with a tech company based in the United States. However, a spokesperson for the Japanese automaker refused to comment on the matter, insisting that details about the tie-up with Honda will be disclosed by the middle of the month.
It’s worth nothing that Taiwanese tech giant Foxconn was reportedly interested in buying some of Renault’s stake in Nissan. However, discussions were paused when it became obvious that Nissan would rather hold talks with Honda instead. Bloomberg reports that the iPhone maker still hasn’t given up on the idea. Renault is Nissan’s largest shareholder by holding a 36% stake.
Officially, the discussions between Nissan and Honda have revolved around a mega merger, which would create the world’s third-largest automaker. However, multiple reports published in recent days have painted a different picture. Honda allegedly wants to make Nissan a subsidiary but it’s facing strong opposition from Nissan's board members. The Japan Broadcasting Corporation (NHK) claims the discussions won't continue unless Nissan agrees to become a Honda subsidiary. That seems increasingly unlikely, especially since Nissan is now reportedly looking for a different ally.
The urgency factor is obvious. At the end of November 2024, The Financial Times quoted two unnamed Nissan executives saying that the company has “12 to 14 months to survive.” Whether that’s true or not remains to be seen, but the clock is ticking, and layoffs are looming. In November, the Yokohama-based company announced plans to eliminate 9,000 jobs and reduce its global manufacturing capacity by 20%.
It's said that Nissan will officially announce its intention to withdraw from the Memorandum of Understanding before publishing its third-quarter earnings next week. The MoU signed in December included a massive cancellation fee of ¥100 billion ($655 million), but if Honda and Nissan mutually decide to part ways without creating a joint holding company, they won’t have to pay.
Sources: Bloomberg, Reuters, The Financial Times, NHK
