© Honda – A recent concept for an EV.
Honda and Nissan have the plan to leave together. The automakers could not agree on the structure of the new merged company.
Honda and Nissan signed in December A memorandum or understanding (MOU) to continue together. After this merger, where possible Mitsubishi would also be involved, a Japanese autog giant would arise with a joint market capitalization of 50 billion dollars. The aim was to bundle resources, knowledge and technologies and to work together on the development of electric cars, said Honda president Toshihiro Mibe at the end of December.
It may never come to a meeting, at least not in the form of a merger. In one press release let the parties know that they have agreed to end the MOU. This means that the merger plans are definitely gone.
‘Take it or leave it’
In the press release, Honda and Nissan explain that the companies have discussed what they wanted to get from the merger. The structure of the merged company to be established was also discussed – the negotiations seem to have stalled. Honda is said to have presented various options, including the establishment of a holding company. From that company, the group wanted to name the CEOs and the majority of the directors.
In another proposal, Nissan would fall under Honda as a subsidiary. In that case too, Honda would get almost complete control over the merger and the future of both car brands. At the beginning of February Honda would have presented this as a ‘Take it or Leave it’ deal, which ultimately led to the failure of the negotiations.
In a statement, the companies announced that they had terminated the interviews to “prioritize rapid decision -making and the implementation of control measures in an increasingly volatile market environment on the way to the era of electrification.” This suggests that the negotiations dragged on too long and possibly also influenced decision -making within the two car brands.
Stronger cooperation
Although the merger plans are stranded, Honda and Nissan still see opportunities for cooperation. It would be a ‘strategic cooperation’ in the field of intelligent hardware and electric vehicles. It may be a partnership that is comparable to the existing alliance between Nissan and Mitsubishi.
The merger plan of Honda and Nissan has previously encountered criticism. Former Nissan CEO Carlos Ghosn called it a “desperate act” and practically “awkward”, while the two Japanese brands saw benefits to cope with the major changes in the car industry.
