Nissan is reportedly halting talks with Honda to merge, a month after the two companies announced they would move forward.
According to a new report from Tokyo-based Nikkei Asia, Nissan will suspend its merger talks with Honda, citing growing differences as the two automakers attempted to reach terms on a deal to combine forces under a new holding company. Just over a month after the announcement made waves worldwide in late December, it appears Nissan is walking away from the table, shortly after reports emerged that Mitsubishi might also back out of the deal (it’s officially still weighing its options, though a formal decision should come soon on Mitsubishi’s involvement).
Multiple sources informed Nikkei of the plans, though neither automaker has yet to officially announce suspension of its merger talks to the media at-large or their respective shareholders.
According to people close to the matter, however, Nissan informed Honda of its intent to stop the talks on Tuesday. On Wednesday, it held a meeting with its board of directors and discussed scrapping December’s memorandum of understanding (MOU) that laid out preliminary plans for how the merger would move forward, barring regulatory hurdles.
Major sticking points from each side seem to have stalled any potential of a merger at this point. Per the recent report, Honda’s proposal for the merger would effectively turn Nissan into a Honda subsidiary — although the December announcement clearly aimed for more of an equal partnership. From Honda’s side, an equal integration would require Nissan to restructure its own internal operations, which is something that allegedly failed to happen quickly enough to satisfy Honda executives. One major fear, given each automaker’s current financial position, was that Honda would leverage its relative size and market status to effectively become the dominant entity in the proposed merger.
A Honda spokesperson told news outlets that it is “currently in the process of discussing various matters, including the facts reported in the media”. Nissan took a similar tack, saying in response to the Nikkei story: “We aim to finalize our direction by mid-February and will announce it at that time”.
As it stands, then, we’ll likely get official comments on the status of the proposed merger, in either direction, in the next week or two.
