TOKYO: According to a report from Japanese newspaper Asahi Shimbun on Wednesday, Honda and Nissan may call off merger talks. Later that day (17:33 JST), Nikkei reported that Nissan would suspend the negotiations with Honda because the two automakers had been unable to reach a consensus on the terms of the deal.
The two companies, Japan’s second and third-largest car makers, announced last year that they would begin formal talks on a merger. The Sun reported that this move responded to the growing competition from electric vehicle makers, especially China’s BYD, disrupting the global auto industry.
If the merger had gone ahead, it would have created the world’s third-largest automaker, behind Toyota and Volkswagen.
Nissan has been struggling more than others, recovering from the crisis following the 2018 arrest and removal of former chairman Carlos Ghosn. The talks also come amid the uncertainty of potential tariffs from the US, where tariffs against Mexico could hurt Nissan more than Honda or Toyota, analysts say.
Asahi reported that both Nissan and Honda’s boards will soon meet to discuss whether to call off the merger talks. It said the talks were not progressing as Honda, the bigger automaker, had hoped.
Honda’s market value of US$47 billion (S$63.42 billion) is nearly five times that of Nissan.
Honda proposed making Nissan a subsidiary, but Nissan strongly opposed the idea, according to Asahi. In December, both companies planned to create a holding company by August 2026, with their shares delisted.
The two automakers initially aimed to decide the direction of the integration by the end of January, but this was later delayed to mid-February.
Renault, Nissan’s long-term partner, has previously expressed openness to the merger. The French automaker owns 36% of Nissan, with 18.7% held through a trust.
In late January, Reuters reported that Mitsubishi Motors may opt out of the planned business merger with Nissan and Honda. /TISG