- Honda and Nissan confirmed on Thursday they have canceled merger talks. The announcement halts a deal that would have made them the world’s third-largest automaker.
- The Japanese auto giant said in a joint statement that they “agreed to terminate” the memorandum of understanding signed in late December for a proposal to integrate the companies.
- The company’s move to merge was seen as an effort to catch up with Tesla and Chinese automakers like BYD in the expanding electric vehicle (EV) market.
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Honda and Nissan confirmed on Thursday, Feb. 13, that they have canceled merger talks, halting a deal that would have made them the world’s third-largest automaker.
The Japanese auto giants said in a joint statement they “agreed to terminate” the memorandum of understanding, signed on Dec. 23, for a proposal to integrate the companies.
Why were the companies talking about merging?
The company’s move to merge was seen as an effort to catch up with Tesla and Chinese automakers like BYD in the expanding electric vehicle market.
Honda’s CEO asserted in December that merger talks were not an attempt to bail out Nissan.
Nissan saw its profits in the six months ending in September 2024 fall 94% compared to the same period in 2023. The losses led the company to lay off 9,000 employees.
Nissan has struggled since a long-time partnership with French carmaker Renault fell apart. Some analysts reportedly predict Nissan could face bankruptcy as soon as next year.
What caused the cancellation of the talks?
Japanese media outlets reported that talks on a merger between Nissan and Honda were stymied after Honda proposed making Nissan a subsidiary rather than merging under a new holding company.
Honda confirmed that it “proposed changing the structure from establishing a joint holding company… to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.”
As a result, companies said in the joint statement Thursday, it was “most appropriate to cease discussions and terminate the MOU.”
How will the cancellation of talks impact collaboration?
Both companies said the cancellation of merger talks will not impact earnings for either automaker.
Mitsubishi Motors Corporation had said it was considering joining the Honda-Nissan partnership. The combination of the three automakers would have reportedly resulted in a holding company worth more than $50 billion.
The three companies also said they will continue to collaborate on EVs and smart cars with self-driving capabilities.