Nissan suspends merger talks with Honda

Nissan Motor Co. will suspend merger talks with Honda Motor Co. after the two Japanese automakers failed to agree on key terms, such as ownership stakes in the joint venture, Nikkei reported on Wednesday. Nissan will withdraw the memorandum of understanding signed in December.

Honda had proposed that Nissan become a subsidiary of its own, a major change from the original plan to create a joint holding company, but this proposal was rejected due to strong opposition within Nissan.

The two companies will consider whether to resume merger negotiations or whether to continue collaborating on projects such as electric cars in the future.

In December 2024, Nissan and Honda announced that they would begin negotiations to merge into a joint holding company in 2026, while retaining their respective brands. If the merger were to go through, it would create one of the world's largest automakers by sales. The companies aimed to finalize the formal agreement by June 2025.

Honda, estimating that Nissan's recovery would take longer, suggested that Nissan be turned into a subsidiary under its management. However, this proposal met with strong opposition from Nissan directors and shareholders, who demanded a more equal partnership. This disagreement led to the suspension of negotiations.

Following the news, Nissan shares fell more than 4 percent before the Tokyo Stock Exchange suspended trading. Honda shares, on the other hand, continued trading and closed up more than 8 percent. /Telegraph/