The merger negotiations between Honda and Nissan are facing a potential breakdown. According to Japanese news outlets, Honda proposed making Nissan a subsidiary before February 1, 2025, but Nissan strongly opposed this move as it would result in a loss of operational control, raising concerns that the merger talks could ultimately fail.
Japanese media, including Yomiuri and Asahi Shimbun, reported that Honda and Nissan plan to create a joint holding company by August 2026. However, due to delays in Nissan's restructuring efforts, Honda is considering making Nissan a subsidiary to take control and speed up the process.
Nissan, in negotiations since late January 2025, has concluded that becoming a subsidiary of Honda is unacceptable. The company insists any merger must be on equal terms and strongly opposes the idea of becoming a subsidiary. Honda mentioned that a rejection of their proposal might lead to the collapse of merger negotiations.
Both parties initially aimed to finalize the merger's general direction by the end of January 2025, but on January 31, they announced an extension to mid-February.
Honda and Nissan will hold separate board meetings to decide whether to terminate their merger talks. Nissan executives privately expressed on February 4 that reaching a mutual agreement with shareholders seems nearly impossible, casting doubt on the continuation of the negotiations.
According to the reports, sources close to Honda criticized Nissan for lacking urgency in addressing its operational crisis, indicating that Honda no longer has the capacity to continue accommodating these issues.
Nissan plans to lay off 9,000 employees globally and cut production at its subsidiaries in the US, Thailand, and Japan due to poor performance. Despite these efforts, Honda feels more is needed. Meanwhile, Mitsubishi Motors is watching the merger talks between Honda and Nissan before deciding on joining the consolidation.