Nissan and Honda Terminate Merger Talks

Nissan, Honda, and Mitsubishi have officially ended the memorandum of understanding signed in December last year. This decision effectively cancels a $60 billion merger, which could have significantly bolstered the Japanese automakers’ ability to compete against rising Chinese manufacturers. Insider sources indicate that the deal fell apart due to deepening disagreements between the parties, exacerbated by Honda’s proposal to turn Nissan into its subsidiary.

Although the merger negotiations have now collapsed—prompted by Nissan’s strong opposition to being placed under Honda’s control—the companies will continue their collaboration in other areas. Honda, Nissan, and Mitsubishi remain committed to their strategic partnership, which focuses on the development of smart and electrified vehicles.

Had the merger materialized, the newly formed entity would have been the world’s fourth-largest automaker, trailing only Toyota, Volkswagen, and Hyundai in terms of global sales. Now, however, Nissan—facing a deep financial crisis—must seek a new strategic partner to ensure its survival. At present, Nissan’s market value is nearly five times lower than Honda’s, standing at approximately 7.5 trillion yen. A decade ago, the two companies were valued at nearly the same level.

Furthermore, in November, Nissan announced a large-scale restructuring plan, which includes laying off 9,000 employees worldwide and cutting production volumes by 20% as part of a cost-saving strategy.