Japanese automotive giants Honda and Nissan have decided to end their merger discussions, which had aimed to form the world’s third-largest auto manufacturer by sales volume, putting an end to the speculation surrounding the $60 billion potential deal.
On the stock market, Honda shares settled 2.14% higher, whereas Nissan experienced a slight decline of 0.34%.
The discussions, which began in December, originally intended to bring together the two major automakers. However, Honda reportedly deviated, suggesting Nissan merge with one of Honda’s subsidiaries instead. This shift in proposal included demands for factory closures and significant workforce reductions at Nissan.
Honda’s CEO, Toshihiro Mibe, had previously articulated that the merger sought to leverage shared resources and intelligence, thereby achieving economies of scale and valuable synergies while maintaining brand identity. Notably, Nissan’s stock had surged by 24% on December 18 following media reports of a potential merger, marking its most significant daily gain since records began in 1985.
The merger talks followed shortly after Nissan’s lackluster second-quarter financial results, wherein the company announced plans to cut 9,000 jobs and reduce its global production capacity by 20%. Meanwhile, reports in early February disclosed that the merger negotiations had come to a halt due to unresolved differences over Honda’s conditions.
Neither company commented when these reports surfaced, insisting at the time there was no official backing for the claims, but they anticipated reaching a strategic decision by mid-February, with plans for an official announcement for their future direction.
