Nissan and Honda agreed this Thursday to terminate the memorandum of understanding signed on December 23, 2024, to consider a commercial integration between the two companies, confirming what had been speculated in recent days.
In a statement, the companies informed that, since the signing of the memorandum of understanding, the management teams of both organizations had evaluated the market environment, the integration objectives, and the strategies and management structures to follow after the integration. As a result of this analysis, they decided not to proceed with the merger.
Negotiations between Nissan and Honda
During the negotiations, various alternatives regarding the business integration structure were evaluated. Honda suggested modifying the initial proposal and establishing a joint holding company, where it would appoint the majority of directors and the CEO, based on a shared transfer of shares. Under this model, Honda would be the parent company, and Nissan would act as a subsidiary.
As a result of these discussions, both companies concluded that, in order to prioritize speed in decision-making and the implementation of management measures, the best course of action was to end the negotiations and cancel the memorandum of understanding.
Will Nissan and Honda launch electric cars?
After retracting from the commercial merger, Nissan and Honda did not rule out the possibility of future collaboration within the framework of a strategic partnership focused on the era of intelligence and electric vehicles, aiming to optimize the corporate value of both companies.
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How would the cancellation of the Nissan-Honda merger affect Nissan?
The failure of the merger raises doubts about Nissan’s future, as the company is currently in a recovery phase while trying to reduce 9,000 jobs and cut 20% of its global capacity.
Without external support, the company faces the challenge of overcoming its latest crisis on its own. Nissan has faced more difficulties than some of its competitors during the transition to electric vehicles and has not yet fully recovered from the crisis triggered by the arrest and dismissal of its former president, Carlos Ghosn, in 2018.
According to a spokesperson for Nissan, its long-time strategic partner, Renault, will firmly safeguard the interests of the group and its shareholders.
Honda’s Stock Drops
Before the companies issued their statement, rumors about the potential collapse of the negotiations with Nissan caused Honda’s stock to drop more than 4% on the Tokyo Stock Exchange. The automotive company currently has a market capitalization of approximately $51.9 billion.
Which brands belong to Nissan?
Currently, Nissan markets over 60 car models under the following brands:
- Nissan
- Infiniti
- Mitsubishi
- Renault
- Alpine
- Datsun
- Pimiento
- Dacia
Which brands belong to Honda?
The Tokyo-based company manufactures not only cars but also airplanes, motorcycles, and robots under two brands:
- Acura
- Honda
Will Foxconn buy Nissan?
Since Nissan’s financial difficulties became known, Foxconn has confirmed its interest in acquiring a significant stake in the company to begin producing its vehicles.
The Taiwanese company, famous for making iPhones, intends to focus primarily on the production of affordable electric cars. However, Foxconn needs to expand its industrial capacity, and Nissan can provide exactly that, with its numerous factories around the world.
In November, Young Liu, president of Foxconn, revealed that his group was in talks with two Japanese automakers, including Nissan. Purchasing shares of Nissan could be a lifeline for the company, although so far, neither of the companies has provided further details on the negotiations.
