Though it’s been identified for round per week now by leaked statements to the media, Honda and Nissan have confirmed their mega-merger is not going down.
Forward of the discharge of their quarterly monetary statements, each automakers issued press releases stating they might “terminate their MOU [memorandum of understanding]” signed on December 23, 2024 to discover a three-way merger between Honda, Nissan, and Mitsubishi Motors — of which Nissan is the biggest shareholder.
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Sometimes with joint bulletins, all events challenge the identical assertion, however on this case Honda’s launch clocked in at a quick two paragraphs, whereas Nissan’s went into better element about why the merger received’t be going forward.
Nissan mentioned “Honda proposed altering the construction from establishing a joint holding firm, the place Honda would appoint the vast majority of administrators and the chief government officer based mostly on a joint share switch as initially outlined within the MOU, to a construction the place Honda could be the guardian firm and Nissan the subsidiary by a share change”.
Reviews earlier this month indicated Honda proposed to purchase Nissan and switch it right into a subsidiary, because it believed the tempo of reform at Nissan was too gradual. This rankled many at Nissan who thought the thought violated the spirit of the preliminary settlement.
Talking on the press convention when the merger was initially introduced, Honda CEO Toshihiro Mibe mentioned Nissan getting its monetary home so as was a “prerequisite” for the merger.
What occurs now?
Nissan and Honda say they’ll “will collaborate inside the framework of a strategic partnership aimed on the period of intelligence and electrified automobiles”. This earlier partnership was introduced in August 2024, earlier than the size of Nissan’s monetary issues grew to become obvious.
For Honda, which has a market capitalisation 4 occasions that of Nissan and continues to be comfortably within the black, there doesn’t appear to be a urgent have to discover a new companion.
Honda at present has a relationship with GM to develop hydrogen gasoline cell know-how. GM additionally builds the Honda Prologue and Acura ZDX electrical crossovers, each of which journey on the Common’s BEV3 structure and use its Ultium battery tech.
An earlier settlement to collectively develop an reasonably priced EV platform was cancelled in 2023. GM has since hopped into mattress with Hyundai, with the 2 trying to work collectively on EV growth.
Nissan, then again, the will for a buddy appears much more pressing. In November 2024, Nissan confirmed a quarterly internet lack of ¥9.3 billion ($92.5 million), with working earnings down 85 per cent in comparison with the identical interval a yr earlier.
To assist proper the ship, the automaker introduced a brand new turnaround plan based mostly totally on decreasing its manufacturing capability by 20 per cent and letting go of 9000 staff globally.
Not like Honda, which has sometimes been shy about cross-shareholdings with different automakers, Nissan has been carefully tied to Renault because the late Nineteen Nineties, when the French automaker rescued Nissan at its post-bubble financial system nadir. The 2 corporations fell out spectacularly when former CEO Carlos Ghosn reportedly tried to engineer a merger, with Renault agreeing in 2023 to slowly promote down its stake and loosen their alliance.
With the collapse of the Honda-Nissan merger, there could also be renewed talks between Nissan and Taiwanese agency Hon Hai Precision Trade — higher generally known as Foxconn — whose predominant line of enterprise is as a contract electronics producer, and is most well-known for making Apple’s iPhone.
Foxconn chairman Younger Liu instructed reporters this week it “did have talks about buying a stake in [Nissan]”, however the firm’s “predominant objective is co-operation”.
The Taiwanese firm has been trying to diversify into the automotive business for whereas, and unveiled its MIH electrical automobile structure in 2020, which it hoped different firms would use to shortly develop EV fashions.
In 2022, Foxconn launched the Foxtron model with a clutch of latest fashions, together with a ute, hatchback and crossover.
What may’ve been
In line with the timeline specified by late December 2024 by Honda and Nissan, extra particulars in regards to the merger have been to be introduced in late January 2025 — a deadline that slipped by — with a definitive settlement to be accomplished by June 2025
Shareholders have been to vote on the merger in April 2026. Following a profitable vote, Honda and Nissan have been to be delisted from the Tokyo Inventory Trade by late July or early August 2026, and changed by a brand new holding firm.
Though the 2 manufacturers have been to have an equal standing inside the new agency, Honda could be the senior companion, having a majority of seats on the board and the flexibility to appoint the CEO.
On the time of the preliminary merger announcement, Mitsubishi Motors — during which Nissan is the biggest single shareholder — mentioned it might resolve by late January 2025 whether or not it might participate within the Honda-Nissan nuptials.
Had a Honda-Nissan-Mitsubishi conglomeration come into being, it might’ve been the world’s third largest automaker. Primarily based on 2023 figures, the brand new Japanese agency would have complete gross sales of round 8.25 million, pushing it comfortably previous Hyundai-Kia into the slot behind Toyota and the Volkswagen Group.
By way of market capitalisation, the merger would have exceeded the US$52 billion (A$83bn) mixture of PSA (Peugeot-Citroen) and Fiat Chrysler to kind Stellantis in 2021.
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