The potential tie-up between Honda and Nissan remains a hot story in the auto industry. The latest news was that Honda was pushing to make Nissan its subsidiary rather than have a merger of equals between the two automotive giants.
However, the situation is changing rapidly. Now, it seems like the merger might not happen after all because Nissan can’t accept the offer’s terms.
Nissan Allegedly Pulls Out Of The Merger
Nissan is reportedly suspending negotiations with Honda, according to Japan’s Nikkei news. The two sides couldn’t negotiate acceptable terms for both companies. Nissan allegedly held a board meeting on February 4 to discuss canceling the memorandum of understanding concerning the merger.
Nissan believed it would have equal power as Honda under the merged holding company. However, Honda allegedly didn’t like Nissan’s proposed business plan and began pushing to make it a subsidiary. Nissan balked at the suggestion.
A separate unnamed source confirmed similar info to Japan’s Kyodo News. This person also said that Nissan refused to be subordinate to Honda, if the companies merged. The tie-up would have created the world’s third-largest automaker.
Earlier in the negotiations, the goal was to form a holding company in 2026. Honda and Nissan would have remained independent from each other, but they would have cut costs through parts sharing and splitting the development costs of new automotive technology.
The automakers recently announced plans to make an official announcement about the merger in mid-February. According to Nissan, the discussions are still ongoing.
“Honda and our company are in the stage of advancing various discussions,” Nissan said in a statement obtained by Kyodo News. “We plan to establish a direction and make an announcement around mid-February.”
What’s Next?
If Nissan backs out of the merger deal with Honda, the company will still need to restructure to survive. In 2024, an unnamed brand representative admitted the automaker had just 12 to 14 months to survive. It was looking for funding to keep things going, and Honda seemed like a strong potential partner.
Renault currently holds a significant stake in Nissan. The French automaker wants to maximize the value of its shares if the business sells a portion of them to the Japanese brand’s new investor.
TopSpeed’s Take
We can’t know for certain until there’s an official announcement, but the Honda-Nissan merger seems dead at this point. However, as long as negotiations are happening, never say never. A tie-up between the companies would seem to bring advantages to both of them, assuming they can come to terms on a deal.
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