Japanese auto giants Honda and Nissan on Thursday confirmed that they had scrapped merger talks introduced in December, bringing an finish to a tie-up that will have created the world’s third-largest automaker.
The corporations mentioned in a joint assertion that they “agreed to terminate the MOU (memorandum of understanding) signed on December 23 final yr for consideration of a enterprise integration between the 2 corporations.”
The corporations’ intention to affix forces had been seen as a bid to meet up with Tesla and Chinese language corporations within the electrical automobile market.
Honda’s CEO insisted in December that it wasn’t a bailout for Nissan, which final yr introduced hundreds of job cuts after reporting a 93 p.c plunge in first-half web revenue.
Nissan Motor Company and Honda logos are seen at a joint press convention on their merger talks, in Tokyo, on Dec. 23, 2024.
Kim Kyung-Hoon / REUTERS
Native media stories have mentioned the discussions unravelled after Honda proposed making its struggling rival a subsidiary as an alternative of the plan, introduced in December, to combine below a brand new holding firm.
Within the joint assertion, the automakers confirmed Honda “proposed altering the construction from establishing a joint holding firm … to a construction the place Honda could be the guardian firm and Nissan the subsidiary by way of a share change.”
“Because of these discussions, each corporations concluded that, to prioritize velocity of decision-making and execution of administration measures in an more and more risky market atmosphere heading into the period of electrification, it could be most acceptable to stop discussions and terminate the MOU,” the assertion mentioned.
The cancellation of the merger talks will not impression the earnings of both automaker, it mentioned.
Honda reported a 7% decline in income Thursday for April-December, to 805 billion yen ($5 billion), whereas Nissan projected an annual web lack of $518 million attributable to sagging gross sales for the 12 months ending in March. That might be a drastic reversal from a revenue of 426.6 billion yen ($2.7 billion) within the earlier yr.
Mitsubishi Motors Corp. had mentioned it was mulling becoming a member of the Honda-Nissan mixture. A 3-way merger might have resulted in an organization value greater than $50 billion primarily based on their market capitalization in December.
The three automakers mentioned Thursday they might preserve working collectively on electrical autos and good vehicles, comparable to these with autonomous driving capabilities.
The three-way merger would have created The merger was estimated to be value greater than $50 billion.