Ford Rivals Honda And Nissan Officially Call Off Merger

As Ford Authority previously reported, Ford rival Nissan began engaging in talks with Honda back in late December, with the expectations that the two companies would set up a joint holding company and explore a merger that – if agreed to and approved – would become the world’s third-largest automaker. However, earlier this month, news surfaced that Nissan was on the verge of calling off these merger talks as Honda reportedly wanted it to become a subsidiary rather than more of an outright partner in this process, a notion that Nissan “balked” at. Now, those merger talks are officially dead.

Even though Honda and Nissan released statements last week indicating that no decision had been made as of yet, and that plans were expected to be finalized by mid-February, Honda has now announced that the memorandum of understanding (MOU) between the two companies designed to explore a merger has officially been terminated. According to Honda, the automakers mulled various options over the past couple of months regarding the structure of the business integration.

Honda noted that it proposed changing the structure from the original plan to establish a joint holding company – where it would appoint the majority of directors and the chief executive officer based on a joint share transfer as initially outlined in the MOU – to a structure where Honda would be the parent company and Nissan the subsidiary through a share exchange, as per the previous report. However, both companies ultimately determined that given the current volatile state of the automotive market, such a move didn’t seem appropriate.

Regardless, Honda and Nissan plan to collaborate in areas including electrified vehicles and intelligence features moving forward, via a strategic partnership – something that Ford isn’t so keen to explore at the moment. Nissan was eager to explore a potential merger with Honda after it has been struggling mightily as of late, previously announcing that it planned on laying off 9,000 workers, slashing its production output by 20 percent, and canceling certain models in response to sinking sales and profit.