In early December 2024, Honda and Nissan inked a deal to explore the potential of a mega-merger. The two Japanese brands signed a memorandum of understanding (MOU) and set up a committee to debate the possibility of establishing a new holding company that would become operational as early as 2026. However, tensions quickly surfaced, and a new report indicates the deal might ultimately fall through.
Reuters cites the Japanese daily newspaper The Asahi Shimbun saying the Honda-Nissan merger may be called off. Without giving names, the publication quotes "several sources" familiar with the matter, declaring the merger talks could end since the two brands have failed to reach an agreement. Both automakers will hold board meetings to discuss whether the tie-up is still worth pursuing, but the situation doesn’t look good. Nikkei Asia is also reporting that Honda and Nissan will suspend the merger talks.
Officially, the two have only been talking about a merger. However, behind closed doors, Honda reportedly expressed interest in turning Nissan into a subsidiary. Yes, Honda apparently wanted to buy Nissan outright but faced strong opposition, according to The Asahi Shimbun. As some will recall, months before the merger talks were even confirmed, former Nissan supremo Carlos Ghosn said Honda was interested in a "disguised takeover" of Nissan:
"I can't imagine for one moment how it's going to work between Honda and Nissan unless it's a takeover, unless it's a disguised takeover by Honda of Nissan and Mitsubishi with Honda in the driver's seat. It's going to be a takeover, a disguised takeover.”
According to Bloomberg, Nissan could hold a board meeting later today to vote against Honda's desire to take control. But some Nissan higher-ups are believed to be okay with Honda calling the shots, so we'll have to wait and see how this plays out. While a Honda spokesperson refused to comment, Reuters heard from Nissan that discussions are still happening and that a final decision will be announced by the middle of the month.
Although Mitsubishi signed an MoU with Honda and Nissan for a potential alliance in certain areas, the smaller Japanese carmaker is reportedly not interested in participating in the mega-merger. Mitsu apparently wants to remain independent but is open to the idea of a closer collaboration.
It's also been reported recently that Honda doesn't want Renault to be involved in the merger and wants Nissan to buy back its shares so that the French automaker is out of the tie-up. If Honda and Nissan decide to merge, which seems increasingly unlikely, the resulting holding company will become the third-largest automaker by sales, behind Toyota and the Volkswagen Group.
Sources: The Asahi Shimbun via Reuters, Bloomberg, Nikkei Asia
