Recent reports suggest that the ambitious merger talks between Japanese automotive giants Honda and Nissan, initiated in early December 2024, are facing significant hurdles and may be called off. The initial memorandum of understanding (MOU) sparked industry-wide discussion about the potential creation of a mega-automotive entity. However, tensions seem to have escalated rapidly, casting doubt on the future of this alliance.
According to Reuters, citing The Asahi Shimbun, several sources familiar with the discussions indicate that Honda and Nissan have struggled to reach a consensus, leading to the possibility of abandoning the merger plans altogether. Both companies are reportedly scheduled to hold board meetings to deliberate on the viability of continuing merger discussions. Nikkei Asia is also reporting on the potential suspension of these critical talks, further fueling speculation about the deal’s imminent collapse.
While officially presented as a merger of equals, behind the scenes, a different narrative appears to be unfolding. Reports suggest that Honda’s interest extended beyond a simple merger, with the company allegedly seeking to bring Nissan under its umbrella as a subsidiary. This ambition, characterized by some as Honda wanting to effectively buy Nissan, has reportedly met with strong resistance. Interestingly, months prior to the formal merger discussions, former Nissan CEO Carlos Ghosn had already voiced concerns about a potential “disguised takeover” by Honda, suggesting a pre-existing awareness of such intentions within the industry.
“I can’t imagine for one moment how it’s going to work between Honda and Nissan unless it’s a takeover, unless it’s a disguised takeover by Honda of Nissan and Mitsubishi with Honda in the driver’s seat. It’s going to be a takeover, a disguised takeover.” – Carlos Ghosn, former Nissan CEO.
Bloomberg further reports that Nissan might convene a board meeting to vote against Honda’s proposal for a controlling stake. However, opinions within Nissan seem divided, with some executives reportedly open to the idea of Honda taking the lead. Nissan, via a spokesperson speaking to Reuters, stated that discussions are ongoing and a conclusive decision is anticipated by mid-month. Honda has declined to officially comment on the unfolding situation.
Mitsubishi, while part of the initial MOU for broader collaboration, is reportedly not interested in participating in a full-scale merger. The company appears to favor maintaining its independence while remaining open to collaborative projects within specific areas alongside Honda and Nissan. Furthermore, recent reports indicate Honda’s desire to exclude Renault from the equation, pushing for Nissan to repurchase shares held by the French automaker.
Should the Honda and Nissan merger proceed—an increasingly uncertain prospect—the resulting entity would have become the third-largest global automaker in terms of sales volume, trailing only Toyota and the Volkswagen Group. However, as the situation evolves, the automotive world watches to see if this potential powerhouse will ever materialize, or if the dream of “Honda Buys Nissan” will remain just that – a dream.
Sources: The Asahi Shimbun via Reuters, Bloomberg, Nikkei Asia
