Nissan shares plunge after it ended merger talks with Honda
Despite its poor economic performance, burdened by debt and falling profits, Japanese media report that the automaker has abandoned merger talks with its competitor.
Nissan factory in the United Kingdom
Shares of Nissan dropped 4.8% in Tokyo after local media reported that the automaker had walked away from merger talks with Honda.
The Nikkei newspaper reports that Nissan's leadership abandoned the talks after its competitor shifted plans—opting to make Nissan a subsidiary instead of merging the two companies into a new conglomerate.
Following the automaker's plunge, the Tokyo Stock Exchange suspended Nissan's listing to verify the accuracy of the reports. Meanwhile, Honda's shares surged 12%.
AFP reported that in December, the two Japanese automakers agreed to begin talks to create the world’s third-largest auto group, a move aimed at competing with Tesla and Chinese electric vehicle companies.
Honda's CEO stated at the time that the move was not a rescue operation for Nissan, which had announced thousands of job cuts last year following a 93% drop in first-half profits.
Nissan has faced a turbulent decade, highlighted by the 2018 arrest of its former chairman, Carlos Ghosn, in Japan, and his subsequent escape to Beirut in a bizarre operation.
The company also carries billions of dollars in debt, which, according to press reports, must be repaid within the next two years.
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