Merger talks between Honda and Nissan come to an end

Japanese auto giants Honda and Nissan confirmed Thursday that they have abandoned their merger talks, announced in December. In a joint statement, the two companies noted that "it would be more appropriate to cease discussions and terminate the memorandum of understanding" signed at the end of 2024.

The merger would have created the world's third-largest vehicle manufacturer, and aspired to catch up with electric car giants such as U.S.-based Tesla and Chinese companies.

Share swap

The talks took a turn when Honda proposed altering the merger plan that had been agreed upon in December, suggesting instead that Nissan be converted into a subsidiary, rather than creating a new holding company between the two firms.

This was recognized in the joint statement, which states that Honda "proposed changing the structure from establishing a joint holding company (...) to a structure in which Honda would be the parent company and Nissan the subsidiary through an exchange of shares.”

"Prioritizing speed in decision making and execution"

From there, there were issues in the negotiations, especially regarding the companies' scale of command, leading the leaders to conclude that "in order to prioritize speed in decision making and execution in an increasingly volatile market as we enter the era of electric vehicles, it would be more appropriate to cease discussions."

However, they indicated that they will continue to "collaborate within the framework of a strategic alliance aimed at the new era of smart and electric vehicles, seeking to create new value and maximize the corporate value of both companies."

In December, Honda's management emphasized that the merger was not a financial bailout for Nissan, which had announced thousands of job cuts following a 93% drop in its first-half profit for 2024.