Nissan and Honda officially back out of merger talks

Nissan and Honda have backed out of a potential merger after failing to agree on a hierarchy and structure between the two companies.

Both brands signed a memorandum of understanding (MOU) just before Christmas last year to explore the potential of a merger to combine their resources and expertise.

The proposed merger, which also involved Mitsubishi Motors at one point, was first announced on December 23, 2024.

However, reports emerged last week claiming there had been disagreements over Nissan’s future role in the partnership and this had become a major sticking point.

From the outset, Honda, the larger of the two carmakers, held the dominant position in negotiations.

The initial agreement stated that Honda would nominate the CEO and appoint the majority of board members for the merged entity.

Now in an official statement Nissan said: “During the discussions between the two companies, various options were considered regarding the structure of the business integration.

“Honda proposed changing the structure from establishing a joint holding company, where Honda would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU, to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange.”

As a result of the discussions over the last month, both companies concluded that they should terminate the MOU “in order to prioritise the speed of decision making and execution of management measures in an increasingly volatile market environment heading into an era of electrification”.

Nissan and Honda have said they will collaborate through a strategic partnership on areas like EVs and services, but this won’t be a formal merger of the two companies.

Nissan is now searching for other partners and Taiwan-based electronics manufacturer Foxconn has already stepped forward and confirmed it is opening to working on a deal.

US-consumer electronics and brand giant Apple is also rumoured to be in discussions about taking a stake in Nissan, which would fast track Silicon Valley into the world of automotive.

US-based private equity firm KKR is also understood to be evaluating a deal with Nissan.