Nissan has stepped back from potential merger discussions with Honda, putting a $60 billion deal in jeopardy that would have created the world’s third-largest automaker. Multiple sources revealed that deepening differences between the two Japanese giants, particularly Honda’s push to make Nissan a subsidiary, have caused tensions. Initially envisioned as a merger of equals, this shift in approach has prompted Nissan to reconsider its position.
The merger, which would have combined Honda’s market value of $51.9 billion with Nissan’s $10.8 billion, was expected to help both companies strengthen their foothold in an industry rapidly evolving with electric vehicles and increased competition from China’s BYD. However, the merger talks have been complicated by Nissan’s ongoing recovery from a crisis that began with the 2018 arrest of former chairman Carlos Ghosn.
Nissan, currently in the midst of a major turnaround plan aimed at reducing global capacity by 20% and cutting 9,000 jobs, now faces uncertainty about its future without external help. While Honda is concerned about Nissan’s progress on its recovery, analysts warn that without a merger, Nissan’s ability to navigate industry disruptions, such as tariffs and the shift to EVs, may be severely impacted.
Nissan’s long-term partner, French automaker Renault, has expressed a willingness to support the group, but the potential collapse of this merger leaves Nissan with the challenging task of managing its crisis alone.
As of now, it remains unclear whether talks will resume or the two companies will go their separate ways. Both Nissan and Honda have stated that they aim to finalize their direction by mid-February.
