How Nissan and Honda's $60 Billion Merger Talks Collapsed

By Evans Momodu
2 minute digest


The $60 billion merger talks between Nissan and Honda have collapsed after just over a month of negotiations, with both sides failing to agree on key issues, including job cuts, factory closures, and corporate structure.

Honda had initially proposed the tie-up to help both companies compete against rising Chinese automakers, particularly in the electric vehicle (EV) market.

However, tensions grew when Honda pushed for deeper job cuts and factory reductions—moves Nissan resisted due to political and financial concerns.

A major turning point came when Honda proposed making Nissan a subsidiary, a move Nissan saw as an "affront" to its legacy and a violation of the previously agreed memorandum of understanding. The proposal, seen as a de facto takeover, also drew concern from Renault, Nissan’s top shareholder, which vowed to defend its interests.

The breakdown in negotiations leaves Nissan facing significant challenges, including declining sales in the U.S. and China, as well as potential U.S. tariffs on vehicles manufactured in Mexico.

Analysts have criticised Nissan's management for overestimating its position and failing to act decisively to address its financial struggles.

With the Honda deal off the table, Nissan may now explore partnerships with other companies, including Taiwanese manufacturer Foxconn, which has expressed interest in working with the automaker.

However, it remains unclear whether Nissan will find a new strategic partner or attempt to navigate its turnaround independently.
Source: Reuters