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Nissan and Honda Abandon Merger Plans

Nissan and Honda have officially terminated their discussions regarding a potential merger, just a few months after acknowledging that they were exploring the possibility of joining forces. In a recent statement, the two automakers confirmed that they had mutually agreed to end the memorandum of understanding (MOU) established in December 2024. If successful, their merger, potentially including Nissan’s affiliate Mitsubishi, would have created a significant automotive entity valued at approximately $50 billion.

The CEOs of both companies, alongside their management teams, have engaged in extensive discussions about their objectives for the merger and the operational frameworks they envisioned post-integration. Throughout these conversations, they evaluated different structural configurations for the proposed combined entity. Honda put forth various suggestions, one of which included creating a joint holding company where Honda would take the lead in executive appointments and have the majority of directors. An alternative model proposed by Honda would position it as the parent company with Nissan functioning as a subsidiary.

A report from The Financial Times noted that Honda’s proposition of making Nissan a subsidiary was presented as a “take it or leave it” scenario. During a meeting at that time, most of Nissan’s board members reportedly expressed their disapproval of the proposal. However, Nissan opted to wait until mid-February for a formal declaration regarding the merger’s status.

Ultimately, the automakers decided to halt their merger discussions, emphasizing the need to enhance the speed of decision-making and the implementation of management strategies amid a highly volatile market landscape, particularly as the industry approaches a new era dominated by electrification. Despite the end of potential merger talks, both Nissan and Honda expressed their intention to continue collaborating “within the framework of a strategic partnership focused on intelligence and electrified vehicles.” This indicates that while the merger may be off the table, their commitment to working together in areas such as electric vehicle development remains a priority.

Source
www.engadget.com