What started as a potential game-changing merger between Nissan and Honda has now hit a dead end.
Nissan’s President and CEO, Makoto Uchida, recently met with Honda’s CEO, Toshihiro Mibe, to formally call off negotiations, following Honda’s proposal to make Nissan its subsidiary, which has been navigating financial turbulence, the idea of a merger made sense.
However, when it became clear that Honda envisioned a takeover rather than a partnership, Nissan decided to walk away.
A Merger That Promised To Reshape The Automotive Industry
Back in December 2024, Nissan and Honda signed a memorandum of understanding (MoU) to explore a merger that could have created the world’s third-largest automotive group, with a combined annual production of 7.4 million units.
The plan was ambitious and aggressive. The two companies had set a timeline to finalise negotiations by June 2025, with a holding company to be formed by August 2026. If the deal had gone through, both Nissan and Honda would have been delisted from the stock exchange, operating as a unified entity.
But while the idea of a Japanese automotive powerhouse seemed exciting, cracks in the discussions quickly emerged.
The First Signs Of Trouble
By late January, reports suggested that Honda was pushing Nissan to buy back its stake from Renault, an uphill task given the company’s financial constraints. Then came the delay, with both companies pushing back their merger announcement from the end of January to mid-February.
And then came the final blow. Honda proposed making Nissan its subsidiary, a move that they viewed as completely against the spirit of their original discussions.
With this, Nissan is expected to withdraw from discussions at an upcoming board meeting, just ahead of its third-quarter earnings announcement next week.
Honda Stands Firm, Nissan Stands Down
Honda, on the other hand, is not willing to budge. According to reports from NHK via Reuters, Honda is uninterested in proceeding with the merger if Nissan refuses to become a subsidiary.
That leaves Nissan in a precarious position.
2-14 months of financial runway left, according to previous reports, the company must now find a new investor or strategic partner to stabilise its future. Speculation remains about whether Mitsubishi, another struggling Japanese automaker, will step in to fill the gap.
For now, however, one thing is clear: the e-POWER firm would rather fight for survival on its own terms than be absorbed into Honda’s corporate structure.
What Happens Next?
The collapse of this merger raises big questions for both companies. For Honda, does rejecting a partnership of equals means it sees a stronger future alone? And for Nissan, can it recover without the financial backing it was seeking?
For now, Nissan is choosing to walk its own path.
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