What was supposed to be a game-changing $58 billion merger between Honda and Nissan is now on the verge of collapse. Initially framed as a merger of equals, the deal took an unexpected turn when Honda proposed making Nissan a fully owned subsidiary. Nissan’s board quickly pushed back, leaving the future of the merger uncertain. With tensions rising and stakeholders watching closely, will the deal survive, or is this the end of the road for Honda and Nissan’s partnership?
Honda’s Bold Move to Control Nissan Sparks Tensions
The highly anticipated $58 billion merger between Honda and Nissan is now in jeopardy after Honda made an unexpected proposal to turn Nissan into a fully owned subsidiary. Initially planned as a merger of equals, the deal was set to create the world’s third-largest automaker under a joint holding company. However, Nissan’s board swiftly rejected Honda’s latest terms, with CEO Makoto Uchida informing Honda’s CEO, Toshihiro Mibe, of their intent to scrap the memorandum of understanding (MOU).
The merger, first announced in December 2024, aimed to strengthen both companies amid increasing industry competition. However, negotiations quickly turned sour due to clashes over equity ratios, asset valuation, and control of decision-making. Nissan, already struggling with weak financial performance, saw its market capitalization shrink to a fifth of Honda’s, further skewing the balance of power.
Renault, which holds a 36% stake in Nissan, has also pressured Nissan to negotiate better terms. Meanwhile, Honda’s latest approach—seen by some as an aggressive strategy to exit talks—has left the future of the deal uncertain.
What’s Next for Honda and Nissan?
Nissan is expected to formalize its decision to withdraw from the merger discussions at an upcoming board meeting before its Q3 earnings announcement. Despite the tension, no official statement has been released yet, leaving room for last-minute negotiations.
Market reactions have been mixed, with Nissan’s stock declining while Honda’s shares surged following the latest developments. Analysts suggest that if Nissan exits the talks, it may need to explore alternative partnerships to remain competitive in an evolving global auto market.
As the automotive industry watches closely, one thing is clear: the fate of the Honda-Nissan merger will significantly impact both brands’ future strategies.