The proposed merger between Honda and Nissan appears to be on the verge of collapse after the two Japanese automakers failed to agree on key terms. Sources indicate that Nissan sought equal partnership status, while Honda proposed Nissan become a subsidiary, leading to significant friction.
The proposed merger between Honda and Nissan appears to be on the verge of collapse, with sources revealing that the two Japan ese automakers have failed to reach an agreement on the terms of a partnership. Nikkei Asia reports that Nissan is poised to withdraw from merger negotiations with its rival.
These sources indicate that Nissan believed the partnership should treat both companies as equals, however Honda has proposed that Nissan become a subsidiary, a proposition that has generated significant friction. For context, Honda's market value stands at 7.92 trillion Yen ($82.65 billion), while Nissan's is currently 1.44 trillion Yen ($15.03 billion). Nissan has also been grappling with serious financial difficulties recently, leading industry experts to argue that it has less to offer the potential partnership compared to Honda. Although comments from sources to Reuters suggest that merger talks could potentially be revived, the initial timeline for the merger has been thrown into doubt. The carmakers had previously announced their intention to develop a framework for the proposed merger by mid-February, with a definitive agreement outlining the specifics of the deal, including share transfers, by June 2025, and a full merger by mid-2026.Nissan is currently part of the Renault-Nissan-Mitsubishi Alliance, founded in 1999 between Renault and Nissan before Mitsubishi joined in 2016. Last month, Japanese outlet Kyodo News, citing insider sources, reported that Honda wants Nissan to buy out Renault's 35.7 percent stake. This stake, reportedly worth around 557 billion yen (A$5.78bn), is causing Honda concern as it believes Renault's stake could be purchased by a third-party during negotiations with Nissan. Renault recently reduced its stake in Nissan, from 43.4 percent to the current 35.7 percent. Meanwhile, a spokesperson for Renault stated to Reuters that the company would “vigorously” defend the interests of the group and its stakeholders. While Mitsubishi was expected to decide by the end of January 2025 on whether it would join the merger, a report last month by The Japan News, citing unidentified sources, suggests that the brand is making arrangements to exist outside of the Honda-Nissan merger. Despite earlier indications that it was strongly considering joining the partnership, Mitsubishi could still potentially cooperate with both Nissan and Honda. Nissan is Mitsubishi’s largest shareholder but recently sold off an undisclosed portion of its 34 percent stake. A merger between Honda and Nissan would create the world’s third-largest car manufacturer, based on 2024 production volumes, trailing behind market leader Toyota (including Lexus, Daihatsu and Hino) and the Volkswagen Group. In 2024, Honda produced 3,733,602 vehicles (a 11.9 percent decrease), while 3,144,470 vehicles (an 8.7 percent decrease) rolled off Nissan production lines, totaling approximately 6.88 million vehicles. Mitsubishi, on the other hand, produced 944,708 vehicles, a 7.7 percent drop compared to the previous year. In Australia, the order is inverted, with Mitsubishi delivering 74,547 vehicles last year, while Nissan and Honda managed 45,284 and 14,092 deliveries, respectively
Honda Nissan Merger Automotive Industry Japan Renault Mitsubishi Market Value Financial Troubles Car Production
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