Nissan may be on the verge of backing out of merger talks with Honda, potentially abandoning a deal that could see the creation of the world’s third-largest automaker.
Reports first surfaced in mid-December that Honda and Nissan were pursuing a merger, one that would create the third-largest automaker. The merger would enable the two companies to better compete, as well as innovate in the EV space and meeting the growing challenge of Chinese EVs.
“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future,” Makoto Uchida, Nissan CEO, said at the time. “If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
According to Reuters, talks are on the verge of breaking down over growing issues between the two sides. The biggest emerging issue is the equality of the two companies. Initially, the talks involved the two companies engaging in a true merger of equals. Recently, however, Honda has floated the idea of Nissan being a subsidiary, which could be a deal-breaker.
“The news saying that Nissan did not want to be a Honda subsidiary appears to highlight that control was a contentious issue,” said CLSA auto analyst Christopher Richter.
“Without being able to have control, Honda appears to be walking away.”
Reuters reports that a decision, which was originally slated for the end of January, has been pushed back to mid-February. Mitsubishi Motors, which is a Nissan alliance partner and was originally interested in joining the merger, has signaled it may no longer be interested.
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