Crisis on Nissan-Honda merger, a condition of Honda can spoil the entire game

Agency:Roots

Last updated:February 05, 2025, 13:12 IST

The merger talks between Nissan and Honda are in crisis. There is dissatisfaction with Nissan’s board with a proposal to create a subsidiary of Honda. The strategy of both companies may be affected when the merger fails.

New Delhi. The ongoing merger talks between two Japanese automobile companies, Nissan and Honda are now getting into trouble. Reuters quoted sources as saying that Nissan was indicated to make his subsidiary, which spread dissatisfaction in Nissan’s board. Nissan believes that this proposal is against the spirit of original interaction. The company’s board will soon hold a meeting to take a final decision on it. If this dialogue fails, it can have a big impact on the future strategy of both companies.

If this merger of Nissan and Honda had been successful, this new company could have become the third largest automaker in the world in terms of sales. But now the stop of this process has raised the question that how Nissan will boil from its current financial crisis without external cooperation.

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Shares boom due to cancellation of merger talks
Even after the news of the cancellation of the merger talks, the shares of both companies were seen to be seen. Honda’s shares recorded 2% and Nissan’s shares gained 1.6%, while Nikkei 225 index declined. This boom shows the confidence of investors that companies became strong on their own path even without merger. Can live

What was the obstacle in merger talks?
According to sources, Honda indicated Nissan to make its subsidiary, which spread dissatisfaction in Nissan’s board. Nissan believes that this proposal is against the spirit of original interaction. At the same time, Honda, whose market evaluation is five times more than Nissan, is concerned about the slow progress of Nissan’s revival scheme. However, spokespersons of both companies have not yet confirmed the cancellation of the merger talks. He said that a formal announcement will be made on this issue in mid -February.

Challenging path in front of Nissan
Setting up rapid growing changes towards electric vehicles (EV) has become a major challenge for Nissan. After the arrest and dismissal of former chairman Carlos Ghosan in 2018, the company has not yet recovered completely. This dialogue is taking place at a time when there is a possibility of disruption of a possible tariff by US President Donald Trump. Analysts believe that tariffs against Mexico will be more harmful for Nissan than Honda or Toyota.

The role of Renault also an eye
Nissan’s long -term colleague Renault also expressed his interest in the process. The French automaker has 36% of Nissan, of which 18.7% is through a French trust. Renault had earlier indicated that it was in principle to merge with Honda.