Honda and Nissan to Officially Announce Merger Cancellation on February 13

Japanese Automakers End Merger Talks After Just Two Months of Negotiations / Reuters 

Japanese automakers Honda and Nissan are set to officially announce the cancellation of their merger plans on February 13, marking the end of negotiations that began just two months ago in December 2024. According to Kyodo News, both companies will convene their respective board meetings to finalize the decision to halt discussions regarding their management integration. Initially, the two companies, ranked second and third in Japan’s automotive industry, had announced plans to establish a holding company by August 2026, with both Honda and Nissan operating as subsidiaries under this new structure. This proposed merger had the potential to create the world’s third-largest automaker, surpassing Hyundai Motor Group in global rankings.

However, the talks quickly deteriorated due to disagreements over the merger structure. Reports from Japanese media outlets such as the Nihon Keizai Shimbun indicate that tensions escalated when Honda proposed a plan that would effectively turn Nissan into a subsidiary. Nissan strongly opposed this, as the company had sought an equal partnership in the merger. The situation worsened when Nissan’s CEO, Makoto Uchida, officially notified Honda of Nissan’s decision to withdraw from the merger talks on February 6.

Despite the collapse of the merger, both companies are expected to continue discussions on strategic collaborations, particularly in areas such as electric vehicle (EV) software development. This includes ongoing projects involving Mitsubishi Motors, where Nissan holds a significant stake.

The failure of the merger comes at a time when the global automotive industry is undergoing a major transformation, driven by the shift towards electric mobility. Kyodo News described the failed merger as a significant setback in what could have been a historic restructuring of Japan’s automotive landscape. Reuters highlighted that Nissan’s insistence on equal treatment, despite facing management challenges that have weakened its industry influence, was a key factor in the breakdown of negotiations. Nissan reportedly rejected Honda’s proposed solutions to address its financial struggles, choosing instead to maintain its independence.

Insiders familiar with the discussions revealed that Honda had pressured Nissan to implement more aggressive cost-cutting measures, including workforce reductions and factory closures. However, Nissan refused to consider plant shutdowns, confident in its ability to recover without such drastic steps. Additionally, Honda’s management reportedly criticized Nissan’s slow decision-making process, which further strained the relationship and contributed to the collapse of the merger talks.

Meanwhile, speculation had arisen that Taiwanese tech giant Foxconn might consider acquiring Nissan following the merger’s collapse. However, Foxconn Chairman Liu Young-way publicly dismissed these rumors during a press conference at the company’s headquarters in New Taipei City. Liu clarified that while Foxconn is open to strategic partnerships with Nissan and may consider purchasing shares if necessary to support collaboration, there are no plans to pursue an outright acquisition. “Our goal is not to buy Nissan’s stock but to cooperate with them,” Liu emphasized, putting to rest any acquisition rumors.

The abrupt end of the Honda-Nissan merger talks underscores the complexities of corporate mergers in the competitive and rapidly evolving automotive sector. While the potential for creating a global automotive powerhouse has faded, both companies remain committed to exploring future collaborations to navigate the challenges of the electric vehicle era.