Plans to create one of the world's largest carmakers stall as differences arise over company structure. Both firms remain tight-lipped, but reports suggest the deal may be off the table.
A potential merger between Japanese auto giants Nissan and Honda, which would have formed the world’s third-largest car manufacturer, has encountered a serious setback.
According to the Japanese business daily Nikkei, Nissan has decided to withdraw from ongoing negotiations due to unresolved differences over the structure of the proposed joint entity.
The merger was announced on January 31, with both companies aiming to finalize plans by June 2025 and establish a new global leader by 2026.
However, recent reports indicate that talks have reached an impasse, prompting Nissan to abandon the memorandum of understanding (MOU) signed with Honda in December.
Conflicting Visions for Leadership
According to reports from 20 Minutos, the disagreement stems from Honda’s proposal to acquire a controlling stake in Nissan, effectively making Nissan a subsidiary within the new joint structure.
This plan was deemed unacceptable by Nissan, leading to its decision to walk away from the deal.
Despite these reports, both companies have denied that any official decision has been made. A spokesperson for Nissan stated, "This news does not correspond to any information announced by the company," and added that an official statement on the negotiations would be made in mid-February.
Honda echoed this sentiment, reiterating that "there is no change" to the announcement made at the end of January.
Impact on Stock Markets
News of the stalled merger talks had an immediate impact on the Tokyo Stock Exchange. Honda shares surged by 8.19% at market close, with earlier gains reaching up to 12%. Meanwhile, Nissan's stock plummeted by 4.87%, prompting a temporary suspension of trading due to the rapid decline.
While the future of the merger remains uncertain, both companies have left the door open for renewed discussions or potential collaboration in specific areas, such as electric vehicle development.
For now, however, one of the most anticipated mergers in the automotive industry appears to be on hold.
