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$60 Billion Nissan-Honda Merger Falls Apart

By  |  February 13, 2025

The proposed merger between Japanese automakers Nissan and Honda, which could have resulted in a $60 billion automotive powerhouse, has officially fallen apart. According to Reuters, the breakdown of negotiations leaves Nissan in a particularly precarious position as competition from Chinese electric vehicle (EV) manufacturers continues to intensify.

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    First revealed in December, the discussions between Japan’s second-largest automaker, Honda, and its third-largest, Nissan, quickly encountered roadblocks. Per Reuters, a major sticking point was Honda’s proposal to make Nissan a subsidiary, a condition that ultimately led to the deal’s collapse. Despite this setback, both companies, along with Mitsubishi Motors, reaffirmed their commitment to a previous agreement to collaborate on technology and other strategic areas.

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    Industry analysts emphasize that such cooperation is essential for traditional automakers facing growing pressure from Chinese brands like BYD, which are capturing market share with more technologically advanced and software-driven vehicles. The challenge is compounded by the looming threat of U.S. tariffs on vehicles imported from Mexico, a key manufacturing base for Japanese automakers.

    Related: Merger with Honda in Doubt, Nissan Expands Partnership Search

    Nissan, in particular, has struggled in recent years, still reeling from the upheaval following the 2018 arrest and subsequent ouster of former chairman Carlos Ghosn. “Honda is pretty confident and has a lot in their favor, whereas Nissan is in a bad place. They don’t have a dance partner right now,” Christopher Richter, an autos analyst at CLSA, told Reuters. “They probably need to think about doing something different.”

    Had the merger gone through, the combined entity would have been the world’s fourth-largest auto group by vehicle sales, trailing only Toyota, Volkswagen, and Hyundai. However, Honda CEO Toshihiro Mibe expressed concerns that prolonged discussions without progress could be damaging. Speaking at a press conference, Mibe acknowledged that while a merger could have provided “quick pain,” he was more worried about the uncertainty of drawn-out negotiations. He also clarified that Honda has no intention of pursuing a hostile takeover of Nissan.

    Adding another layer of complexity, French automaker Renault, Nissan’s largest shareholder, opposed the deal’s terms, particularly the absence of a premium for Nissan shareholders. According to Reuters, this stance contributed to the merger’s demise.

    Source: Reuters