Nissan-Honda merger is officially off the table
The reason for the stalled talks is simple: Honda wanted to make Nissan a subsidiary, and Nissan wanted to stick to the new joint holding company proposed in the Memorandum of Understanding signed in December 2024.
“To prioritize speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification,” the carmakers thus concluded that it would be best to terminate talks and look for other solutions – which Nissan has allegedly already started doing. The Japanese carmaker could cooperate with Foxconn.
Foxconn already saw this opportunity last year and approached Nissan – but was rebuffed at the time. As the Financial Times wrote last week, the Foxconn offer was also the trigger for the “frantic but fleeting round of merger negotiations with Honda” in December.
The Taiwanese company has developed its own EV platform and introduced its own car brand, Foxtron. The FT writes that some Nissan board members are “open to considering a partnership with Taiwanese iPhone contract manufacturer Foxconn.” The latter has since confirmed that it was interested in a cooperation with Nissan.
Nissan is currently often referred to as a restructuring case. Over the years, the Japanese company’s sales have fallen to just over three million vehicles – too little to operate profitably with its own technologies and platforms. The 25-year alliance with Renault is considered a failure. Although Renault is an important shareholder in Nissan with a 36 per cent stake, the French company wants to sell these shares to finance its own investments in electric mobility and software-defined vehicles.
Nissan’s financial difficulties also likely prompted Honda to propose changing the business integration on the table “to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.” Honda had always made it clear that to establish a joint holding company with Nissan, the latter had to improve its performance. Specifically, the carmaker stated that Nissan must complete its “turnaround actions.”
Regardless, the two carmakers will not abandon earlier cooperation plans on software-defined electric cars. Specifically, the carmakers state that “going forward, Nissan and Honda will 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.” According to an interim status report from August 2024, the main areas of cooperation will be batteries and e-axles, among other things.
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