Just weeks after Honda and Nissan revealed plans to explore a merger that could have created the world’s third largest automaker, those discussions appear to be unraveling. According to a Nikkei Asia report, Nissan has informed Honda of its decision to suspend talks, citing fundamental disagreements over valuation and governance. Meanwhile, conflicting statements from both companies suggest that discussions remain ongoing—though uncertainty looms large over the fate of the deal.
Sources cited by Nikkei Asia said that Nissan balked at Honda’s proposal to make it a subsidiary, a deviation from the original plan to form a joint holding company with near-equal influence. The automakers had agreed to determine their respective valuations based on average share prices before the memorandum of understanding (MoU) was signed in December. However, rough estimates suggest the arrangement would heavily favor Honda, whose market capitalization is more than five times Nissan’s size—an imbalance that has become a key point of contention.
Another sticking point was Nissan’s turnaround plan. Honda had set a January deadline for Nissan to present a clear restructuring roadmap before moving forward with integration. Nissan, which has struggled with declining sales and profitability in recent years, unveiled a plan to cut 9,000 jobs globally, with layoffs in North America and Thailand. But Honda reportedly found Nissan’s proposals inadequate and urged more aggressive restructuring measures.
According to Reuters, Nissan CEO Makoto Uchida met with Honda’s CEO Toshihiro Mibe on February 6 to inform him that Nissan wants to formally withdraw from the MoU. Nissan’s board is expected to finalize this decision before it announces its latest earnings.
Despite the reports, both automakers have refrained from making a definitive statement. In a carefully worded response, Honda and Nissan acknowledged media reports but maintained that they are “in the stage of advancing various discussions… We plan to establish a direction and make an announcement around mid-February.”
A report from Automotive Dive also claims that talks remain ongoing, citing a Honda spokesperson who said that more details will be shared at an appropriate time.
If talks collapse, Nissan will be left to pursue its turnaround independently, while Honda may seek alternative partnerships to solidify its position in the automotive market.
For now, the merger’s fate hangs in the balance, and all eyes are on Nissan’s next move.