"Nissan Halts Merger Talks with Honda... Disagreements over Terms and Merger Ratio (Comprehensive)"

Merger Plan Falters in Less Than Two Months
Stock Prices Diverge: Nissan Down 4.87%, Honda Up 8.11%

Uchida Makoto, President of Nissan Motor Company (left), and Mibe Toshihiro, President of Honda Motor Company, are shaking hands for a commemorative photo. On the 5th, Japan's Nihon Keizai Shimbun reported that Nissan has decided to withdraw the basic agreement (MOU) for a business integration with Honda. / Yonhap News

The merger between Nissan and Honda, two of Japan's top three automakers, appears to be falling through. Negotiations were temporarily halted less than two months after the 'big deal' was announced in December last year.

On the 5th, Japan's Nihon Keizai Shimbun reported that Nissan has decided to withdraw the basic agreement (MOU) for the management integration with Honda.

Honda demanded that Nissan, which has been showing poor performance, establish a reconstruction plan as a prerequisite for the management integration talks. Nissan was preparing a rehabilitation plan for this purpose, but the schedule was delayed due to strong opposition to restructuring in some regions.

The two companies also failed to narrow their differences over the merger ratio. When the memorandum of understanding was signed in December last year, the two companies proposed a merger plan to establish a new holding company that would fully incorporate Honda and Nissan as subsidiaries, with Honda appointing the majority of the new holding company's board of directors.

It is presumed that the two sides failed to coordinate on how much the holding company would pay to acquire shares of each company. Honda also proposed incorporating Nissan as a Honda subsidiary, but it is known that Nissan rejected this due to strong internal opposition.

Signs of the merger falling through had been detected early in the industry. The merger schedule and direction, originally scheduled to be announced at the end of last month, were postponed to mid-this month, leading to rumors in the industry that negotiations were facing difficulties.

Of course, the possibility of resuming merger discussions cannot be ruled out. Nihon Keizai Shimbun stated, "There is no decision yet on whether merger discussions will resume or whether cooperation will be limited to the electric vehicle sector."

On the Japanese stock market, Nissan Motor's stock price plunged just before the market closed immediately after the report of the merger possibly falling through. Nissan Motor closed at 386.9 yen, down 4.87% from the previous day. On the other hand, Honda closed at 1,499 yen, up 8.11% from the previous day. This is the opposite movement of stock prices compared to when the merger news of Nissan and Honda, which were facing a performance crisis in December last year, was announced. As Nissan's management instability was highlighted, the merger suspension was interpreted as a positive factor from Honda's perspective.

This content was produced with the assistance of AI translation services.