In a recent development, Nissan Motor Co.’s Chairman, Uchida Makoto, met with Honda Motor Co.’s Chairman, Mibe Toshihiro, to announce a pause in their merger talks.
Nissan has retracted the memorandum of understanding regarding business integration negotiations, signed in December 2024, and walked away from a potential $60 billion deal.
The main reason cited for this decision is the inability of both Nissan and Honda to agree on the terms of the deal. The companies may have faced challenges in valuing each other as parent entities.
According to previous reports by Reuters, Nissan might have called off the talks after Honda indicated its expectation for Nissan to become a subsidiary. Nissan objected, as it seemingly initially envisioned a merger of equals.
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Currently, Honda has a market capitalization of around $51.9 billion, five times that of Nissan. Analysts suggest that if the merger falls through, Nissan could face a significant crisis. Recently, Nissan announced plans to cut 9,000 jobs and 20% of its global production capacity.
Honda is also facing challenges, as in mid-2024, it announced plans to reduce its gasoline car production capacity in China by 30%, equivalent to about 10% of its global output.
Following the news of the paused merger, Honda’s stock surprisingly surged by 8%, while Nissan’s shares dropped by 4% on the Tokyo Stock Exchange.
TH (Tuoitrethudo)
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