Nissan and Honda Officially Canceled Merger Plans

KatadataOTO – The rumored cancellation of the Nissan and Honda merger has finally become a reality. The two companies have agreed not to proceed with the merger plan, thus losing the potential to become the world's third-largest vehicle manufacturer.

Since the signing of the Memorandum of Understanding on December 23, 2024, company executives, including the CEOs, have been discussing the merger while considering various factors. These range from business integration goals and strategies to the post-integration management structure.

Considering the importance of business integration, both companies have consulted with various stakeholders.

During discussions, various options were considered regarding the business integration structure. Honda proposed a structural change from the formation of a joint holding company and to appoint the majority of directors and the CEO based on a share transfer.

Photo : Nissan

In Honda's official statement, this description was already conveyed in the Memorandum of Understanding. Thus, in this structure, they would become the parent company and Nissan the subsidiary.

However, a different statement was made by Nissan. According to Carscoops, the company stated that they and Honda would form a joint holding company where each party would have an equal say.

This change would certainly not be advantageous for Nissan, even though they are currently under pressure.

This disagreement led both companies to decide to halt discussions and terminate the Memorandum of Understanding. They are prioritizing the speed of decision-making and the implementation of management measures in an increasingly unstable market environment moving towards the era of electrification.

Although the merger has been canceled, both companies remain committed to continuing their collaboration on electric vehicle development. It is hoped that the collaboration, which has been ongoing since August 2024, can continue.

This is important because Chinese manufacturers are becoming increasingly aggressive in developing electric vehicles. Therefore, the collaboration must continue in order to catch up.

Photo : HPM

The cancellation of the merger is not actually the end of the world for Nissan. This is because they have already begun actively seeking other partners for an equal collaboration.

One of them is the technology company Foxconn, which had previously expressed interest in a partnership. However, as of this writing, neither company has issued a statement regarding the matter.