Honda and Nissan confirmed they will no longer pursue a merger but will continue collaborating through a “strategic partnership” focused on electric and intelligent vehicle development.
The two Japanese automakers signed an official memorandum of understanding (MOU) in late December, with talks set to conclude by June 2025. If successful, the $60 billion merger would create the world’s third-largest auto group by sales volume.
The merger would be highly beneficial to both automakers, notably Nissan, which was experiencing a downturn in sales and revealed in November that it would cut 9,000 jobs and 20% of its global production capacity.
Despite the initial optimism, disagreements between the companies–particularly over governance and control–ultimately led to the conclusion of the talks.
In early February, a report from Japan’s Nikkei, indicated that Nissan executives were likely to withdraw from the discussions, citing internal leadership clashes. Honda had proposed a structure in which it would serve as the parent company, making Nissan a subsidiary through a share exchange. Additionally, Honda, as the larger automaker, would hold the majority of board seats. Nissan rejected the proposal, which was opposed to the idea of relinquishing a significant amount of control. Executives were also wary of Honda’s insistence on workforce reductions, further complicating the merger’s chances of success.
On Thursday, after board discussions, both companies officially voted to terminate the merger. Following the announcement, Honda’s shares rose by 2.14%, while Nissan’s stock slipped by 0.34%, reflecting investor sentiment over the failed deal.
Although the merger is off the table, the companies will continue collaborating. Their renewed focus on a strategic partnership will likely see them sharing resources in areas like electric vehicle technology and intelligent driving systems.
