Honda and Nissan merger in danger of derailing - who wanted to absorb whom?
It seemed that a new Japanese auto giant was on its way - in December 2024, Honda and Nissan signed a memorandum of understanding on a possible merger that could lead to the creation of a holding company as early as 2026. But now there are reports that the talks are on the verge of collapsing.
Here's What We Know
According to Reuters and The Asahi Shimbun, the merger could be cancelled as the brands have been unable to agree on key issues. The two companies are expected to hold a board meeting to decide whether to continue talks, but the situation looks tense.
The main issue is Honda's true intentions. Officially the talks were about an equal partnership, but behind the scenes Honda allegedly wanted to buy out Nissan and make it its subsidiary.
Former Nissan executive Carlos Ghosn has previously stated that this is not a merger, but a "disguised takeover".
What's next?
According to Bloomberg, Nissan's board of directors may vote today to end talks with Honda. But interestingly, some top Nissan executives are fine with Honda taking the helm.
So far, there has been no official statement from Honda, and Nissan has only noted that discussions are ongoing and a final decision will be made by mid-February.
If the deal falls through, Nissan will be left to deal with its financial problems on its own, while Honda will continue to operate independently. If Honda does gain control, it could change the balance of power in the Japanese auto industry.
Sources: Reuters, The Asahi Shimbun, Bloomberg
