Japanese automobile makers Honda and Nissan have formally ended their merger talks that they had initiated in December 2024. Had the talks fructified it would have created a $60 billion automotive group, which would have been the fourth largest in the world, rivalling the likes of Toyota, Volkswagen and Hyundai.
Honda, Japan's second largest and Nissan, the third largest car maker there, had signed a memorandum of understanding in December to start discussions towards a business integration. However, as the talks progressed, there seem to have been growing differences, including perhaps over the structure and ownership, that may have eventually led to the discussions being called off.
The two companies had considered various options regarding the structure of the business integration. Initially, the plan was to merge and establish a joint holding company.
Later, Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MoU, to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.
"Both companies concluded that to prioritise speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate the MoU," Honda said in a statement on Thursday.
Honda, Nissan and Mitsubishi Motors had also explored the possibility of Mitsubishi's involvement in and synergy sharing in relation to Honda's and Nissan's business integration plans. With Honda and Nissan terminating their merger talks, this MoU regarding a tripartite collaboration too has been called off.
While the merger talks have been called off, Honda and Nissan said they will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles.
In August last year, Honda and Nissan agreed to carry out joint research in fundamental technologies in the area of platforms for next-generation software-defined vehicles. The software field, including autonomous driving, connectivity, and AI, which will determine the value of vehicles in the future and become a source of competitiveness, is an area where technological innovation is extremely rapid and where synergies can easily be obtained through the fusion of resources from both companies, the two companies had said then.
