MW Nissan reportedly balks at Honda's terms, putting their merger in doubt
By Mike Murphy
Shares of Nissan Motor Co. and Honda Motor Co. rose overnight following reports that the automakers' proposed merger may be scrapped.
The Japanese newspaper Asahi Shimbun and the Wall Street Journal reported the two companies' boards would meet as soon as Wednesday to discuss possibly terminating the talks, after Nissan reportedly balked at a new proposal where it would become a subsidiary of Honda, rather than both being subsidiaries of a single holding company.
Nissan's stock (JP:7201) rose nearly 2% in Tokyo trading early Wednesday. Honda's Japanese shares (JP:7267) were up about 3%, after its U.S.-traded shares $(HMC)$ rose 2.4% on Tuesday.
Merger talks to combine the companies and create one of the world's largest automakers were announced in December.
Both Honda and Nissan saw sharp drops in global sales in 2024, especially in China and Southeast Asia, and they have been forced to cut production capacity as demand has dipped. Nissan has been particularly hard-hit, and announced 9,000 layoffs in November.
When the deal was first announced, analysts said it was a sign of much-needed consolidation in the auto industry, as high prices have hurt sales amid competition from cheaper Chinese electric vehicles.
Mitsubishi (JP:7211), a strategic partner of Nissan's, was invited to join the Honda-Nissan merger, but has not yet made a decision.
-Mike Murphy
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(END) Dow Jones Newswires
February 04, 2025 23:14 ET (04:14 GMT)
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