Honda and Nissan confirmed that they were in merger talks only in December 2024, but now these talks are already on the verge of collapse. According to media reports, the talks are failing due to Nissan's resistance.
Talks apparently failed
According to Japanese media reports, the plans for what could potentially become the world's third-largest automaker fell apart before the joint venture could take shape. The main reason for the failure was likely disagreement over the future corporate structure. Honda proposed that Nissan become a subsidiary. However, Nissan rejected this proposal, and talks subsequently broke off.
If the merger ultimately falls through, Nissan will have to find another way to restructure. The automaker is facing serious financial difficulties and only announced a cost-cutting program with job cuts in November 2024. It is unclear whether there are other interested parties in a takeover of Nissan or a merger. Before the talks with Honda, there were also rumors about the Taiwanese electronics manufacturer Foxconn. We will keep you updated as soon as further details become available.
Original article from December 23, 2024:
For Japanese auto giants, the initial focus is on Toyota, the world's largest automaker. Now another giant could emerge in Japan. Japanese media reported that Honda and Nissan are discussing a possible merger. The timeline calls for the expanded collaboration to be completed by June 2025, leading to a full merger.
The world's third-largest car manufacturer could emerge
A joint venture between the two would make it the world's third-largest manufacturer, with nearly eight million cars produced. Mitsubishi could also become part of the company, as Nissan holds a 24% stake in its Japanese competitor. The merger idea is likely due primarily to the fierce competition in the wake of the electric mobility transition, where Japanese companies do not yet offer as many models.
Back in March, the companies involved announced they would collaborate on the development of software and electric cars to leverage synergies and reduce costs. The first joint electric car is expected to emerge from the collaboration in 2030, but a much closer collaboration could now be on the horizon. A letter of intent for merger talks is expected to be signed soon to initiate the official process. Discussions on the intensified collaboration are then expected to be completed by June 2025.
Nissan in crisis
Nissan in particular is likely to be the driving factor in the talks; the carmaker had a disastrous year with 90% less profit since April compared to the previous year, 2023. Not only was Nissan hit hard by the tough battle for the Chinese market, but market share in America has also collapsed because the models on offer are relatively old and do not have any hybrid variants.
Back in November, Nissan announced a cost-cutting program that would eliminate nearly 9,000 jobs and a fifth of production capacity. Merger talks appear to be an appropriate means of bringing Nissan's upcoming restructuring under control. The Taiwanese electronics manufacturer Foxconn, primarily known for manufacturing the Apple iPhone, is also said to have expressed interest in acquiring Nissan, but Nissan apparently turned the Taiwanese down, preferring to talk to Honda. Honda, too, is struggling with tougher competition and has had to lower its profit forecast for the year to under €6 billion, almost 14% less than the previous year.
The Tokyo Stock Exchange saw Nissan and Mitsubishi share prices rise following the news, while Honda's share price declined slightly. Officials only stated that they were in talks about collaborations. A press conference on the topic is reportedly planned for Monday.