A proposed merger between Nissan and Honda is on the brink of collapse after Nissan supposedly rejected Honda's latest proposal. The initial plan, announced in December, envisioned a combined holding company structure. However, Honda reportedly recently proposed making Nissan a subsidiary, a move deemed unacceptable by Nissan's board.
While both companies claim discussions are continuing, and a decision is expected by mid-February, the rumoured disagreement casts serious doubt on the deal's future. A combined entity would create the world's third-largest automaker, making the potential failure a major setback.
The supposed breakdown in negotiations puts immense pressure on Nissan, which has been struggling in key markets like the U.S. and China. News of the impasse impacted stock prices, with Nissan shares falling while Honda's rose, indicating investor perception that Nissan stood to gain more from the merger.
If the deal falls through, Nissan will need to reassure investors, employees, and customers of its viability amidst fierce competition. The company has already initiated cost-cutting measures, including layoffs and production cuts.