Honda announces end of merger talks with Nissan due to disputes

Japanese automaker Honda announced on Thursday that merger talks with Nissan were terminated without an agreement after Honda proposed making Nissan a subsidiary instead of forming a joint holding company.

However, the company stated that Honda, Nissan, and Mitsubishi Motors will strengthen their strategic partnership in vehicle intelligence and electrification.

The firms said in a joint statement that they “agreed to terminate the MOU (memorandum of understanding) signed on Dec. 23, 2024, for consideration of a business integration between the two companies.”

Their plan to join forces was viewed as an effort to compete with U.S. giant Tesla and Chinese firms in the electric vehicle market, aiming to create the world’s third-largest electric vehicle company.

Honda’s ‘subsidiary’ offers derails merger talks

Recent local media reports have said the discussions unraveled after Honda proposed to make its struggling rival a subsidiary instead of the plan, announced in December, to integrate under a new holding company.

In the joint statement, the automakers confirmed Honda “proposed changing the structure from establishing a joint holding company… to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange”.

“As a result of these discussions, both companies concluded that to prioritize speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate the MOU,” the statement said.

They will, however, continue to “collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles, striving to create new value and maximize the corporate value of both companies,” it added.