Honda and Nissan have officially ended discussions on a potential $60 billion merger, concluding months of speculation about a deal that could have created the world’s third-largest automaker by sales volume. Instead of merging, the companies will continue collaborating in the field of intelligent and electrified vehicles.

Negotiations began in December, with initial plans to finalize an agreement by June. However, differences over corporate control and restructuring plans ultimately led to the deal's collapse. According to Reuters, Honda had proposed acquiring Nissan as a subsidiary through a share exchange, but Nissan was unwilling to accept this structure. The company reportedly resisted closing factories and deeper workforce reductions, which Honda pushed for as part of the merger.

On February 6, Reuters reported that Nissan was preparing to step away from merger discussions. The final decision was confirmed on February 13, with both companies announcing the termination of talks while reaffirming their commitment to continued collaboration.

Honda CEO Toshihiro Mibe had previously stated that the merger aimed to improve economies of scale, share technology, and strengthen both brands in an evolving market. However, internal disagreements, including concerns over Nissan’s independence and potential job losses, made the deal unworkable.

Market reactions to the news were mixed. Honda's stock rose 2.14% on Thursday, while Nissan shares dipped 0.34%. The merger speculation had previously sent Nissan’s stock soaring 24% in December, marking its biggest single-day gain since 1985.

The collapse of the merger comes at a time when Nissan is undergoing restructuring. In its second quarter ending September 2024, Nissan announced plans to cut 9,000 jobs and reduce global production capacity by 20%. Meanwhile, Honda continues to perform steadily, reporting a 1.4% increase in revenue for its third quarter, reaching 5.53 trillion yen ($36.4 billion), with operating profit rising 4.6% year-on-year to 397.8 billion yen.

While the merger is off the table, Honda and Nissan have indicated that they will continue to work together to navigate the industry's transition toward electric and autonomous vehicles. Their focus will be on joint research and development rather than corporate integration.

The global auto industry is facing increasing competition and regulatory pressures, particularly in the electric vehicle market. Although a full merger would have positioned Honda and Nissan as stronger competitors against global giants like Toyota and Tesla, their strategic collaboration may still offer mutual benefits without sacrificing their independence.

SOURCE: CNBC | PHOTO: AP/REUTERS

This article was created with AI assistance.