The ambitious $60 billion merger between Honda and Nissan, which would have created one of the world's largest automakers, is officially off. That Memorandum of Understanding (MOU) between the companies has been, so to speak, torn up. In a joint announcement, the two companies also confirmed the end of discussions on a three-way collaboration with Mitsubishi.
However, the door remains open to collaborations. The automakers will continue their partnership in the fields of intelligent and electrified vehicles.
Why did the Honda-Nissan merger talks fail?
Both companies issued statements confirming the failure of discussions. Honda wanted to take control of Nissan by becoming the parent company. That evidently proved a main point of contention and it led to the cancellation of the memorandum of understanding signed on December 23.
Initially, the two companies were to form a holding company with equal power. Honda then proposed a new structure in which Nissan would become a subsidiary. Nissan refused that change, and negotiations collapsed soon thereafter.
For its part, Nissan is now looking for other partners, including a possible deal with Foxconn to develop advances in electrification and new technologies.
Mitsubishi also withdraws from talks
Discussions on a three-way alliance between Honda, Nissan and Mitsubishi were dropped as well. There too, the three brands will continue to work together in a strategic partnership focused on electrification and software development.
This alliance remains enshrined in a memorandum of understanding signed on August 1, aimed at strengthening their competitiveness against Chinese brands during the transition to electric vehicles.
A strategic shift towards electrification
Despite the failure of the merger, Nissan and Honda believe that this decision will enable them to gain speed in decision-making and adapt to changes in the automotive market.
Both automakers state as future priorities to accelerate the transition to electric vehicles, develop intelligent software technologies and build greater strength in the face of Chinese competition.
The merger may be buried, but the collaboration between the automakers is not completely over. Only time will tell if there will be further strategic alliances in the rapidly changing automotive industry.