The planned merger between Japanese juggernauts Honda and Nissan may not come to fruition based on a recent report from Nikkei Asia. The report cites growing differences between the two carmakers as Nissan’s stock dropped 4% in the last week.
Anonymous executives from both Honda and Nissan commented on the stalemate the duo now find themselves in—although it is still unclear what exactly the pain point is between the two.
One possible reason could be Honda’s request for Nissan to buy back its 35% stake from French carmaker Renault. That share is worth approximately P202.8 billion, which might be a tall order for Nissan at this time. In the last few years, the Yokohama-based brand had struggled with global sales while downsizing in several markets—which ultimately led to these merger discussions.
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This comes amid rumors that Honda has suggested acquiring Nissan instead of forging a merger. Another anonymous Nissan executive was apparently dismayed by Honda’s idea to make Nissan a subsidiary instead of a partner.
Last month, Reuters reported that Mitsubishi had already bowed out of the Nissan-Honda merger months ahead of its finalization. Mitsubishi, which holds a 24% stake in Nissan, had floated the possibility of joining the merger to further bolster the partnership and create the third largest automaking company in the world.
The initial plan had been for Nissan and Honda to set up an overall holding company first, and then accommodate Mitsubishi at a later time. The report also stated that Mitsubishi would continue to participate in Nissan-Honda discussions; however, its main focus is growing its operations in Southeast Asia.
With Nissan and Honda expected to finalize their merger by June this year, we should see in the coming months just how determined the two carmakers are to move forward with this partnership.
