Honda and Nissan’s $60bn mega-merger deal collapses

Japan’s second and third-largest automakers, Honda and Nissan, have officially ended discussions on a potential merger, opting instead to continue their cooperation on electric vehicle (EV) technology amid rising global competition.

The companies announced on Thursday that their boards had voted to terminate the Memorandum of Understanding (MoU) signed on December 23, 2024, which was aimed at exploring a business integration.

The proposed merger would have created the world’s third-largest automaker, valued at approximately $60 billion.

Sources suggest Nissan backed out of the deal due to growing differences, particularly Honda’s proposal to make Nissan a subsidiary through a share exchange.

In their joint statement, both firms acknowledged that this restructuring proposal led them to conclude that ceasing discussions was the best course of action.

Despite the termination of merger talks, Honda and Nissan affirmed their commitment to a strategic partnership focused on the development of intelligent and electrified vehicles.

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The companies aim to enhance innovation and maximize their corporate value as they face increasing pressure from US-based Tesla and rapidly growing Chinese EV manufacturers like BYD.

The collapse of the merger also leaves Nissan open to new alliances.

Taiwanese electronics giant Foxconn has expressed interest in potential collaboration, with its chairman, Young Liu, stating that while Foxconn may consider taking a stake in Nissan, its primary objective is strategic cooperation.

Honda and Nissan continue to navigate challenges, including disruptions in the Chinese market and potential US tariffs, as they work toward strengthening their positions in the evolving EV landscape.