Honda Motor Co. and Nissan Motor Co. have officially closed the door on a potential merger, though they will continue to work together on a strategic partnership that includes AI and electric vehicles, the companies announced on Feb. 13.
The two companies on Wednesday agreed to terminate the memorandum of understanding they signed on Dec. 23, 2024, and discontinue “the discussion and consideration of the Business Integration.” Honda and Nissan also terminated a similar agreement that would also have included Mitsubishi Motors Corp. in the combination. Mitsubishi also verified in a statement that discussions between the parties had ended.
The automakers said they had considered several ways to combine the companies. Honda had proposed a stock swap which would have made Nissan a wholly-owned subsidiary of Honda, according to the announcement. The companies also floated a joint holding company for which Honda would nominate directors and the president.
According to Nissan, Honda proposed changing the corporate structure from establishing a joint holding company. This would have allowed Honda to appoint the majority of directors and the CEO based on a joint share transfer as initially outlined in the MOU. This deal would have made Nissan a smaller subsidiary of Honda.
Rumors that the deal was dead had been circulating for weeks, with several media outlets reporting Nissan had balked at proposals that would have made it a Honda subsidiary. While the automakers refused to confirm the reports at the time, they confirmed in Thursday’s announcement talks ended “as a result of these discussions.”
Honda and Nissan also clarified the end of merger talks does not mean the two companies will cease to collaborate.
“Going forward, the Companies 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 the Companies,” the announcement reads.
Nissan in a statement said it is reviewing “other strategic partnership opportunities that could enhance its corporate value.”
In the hours after the announcement, Honda and Nissan’s executives shared their outlook now that the combination talks have officially ended.
Honda CEO Toshihiro Mibe said a relationship of collaboration is more likely the future between Honda and Nissan but reopening merger talks was not, as “both sides were not able to find common ground and reach an agreement.”
“As for the future though, it will not be in form of business integration,” Mibe said.
While the benefits of combining with Nissan had merit, Mibe said Honda is not actively seeking another deal, adding that “we have no such plans going forward.”
Nissan President and CEO Makoto Uchida said during the company’s earnings call with analysts on Thursday that both companies sought to preserve some level of autonomy, but with the parties unable to agree on an organizational structure, they decided to discontinue merger discussions.
As a result of these talks, both automakers concluded that “it would be most appropriate to cease discussions and terminate the MOU” in order to speed decision-making and execution of business objectives in an increasingly volatile market environment as the industry transitions to electrification.
However, Nissan and Honda will continue collaborating through a strategic partnership announced in March 2024 on EVs and AI. It could also help the two Japan-based automakers compete globally with lower-priced EVs from automakers in China, including BYD.
