Nissan and Honda Merger Talks Collapse

Honda's HQ in Japan

Japan has graced the world with many giants. Some from the world of fiction, such as Godzilla, some from the real world, like Nintendo.

However, a new one is on the brink of forming- or rather, was. Nissan and Honda, two major players in the automobile industry, had proposed a merger which would put the estimated value of the company at $58 billion. This merger was initially proposed as a way to push back against Chinese EV companies, as well as provide both companies with significant financial footing. 

The unification of the two companies seemed like a match made in heaven. Nissan was in a period of financial instability, with sales dropping in most of their major markets, and losing out, especially in the EV department, putting their future in jeopardy. Honda would have been that lifeline for them to keep existing as they are and moving forward.

On the other hand, Honda, whilst still doing great, were losing sales to other companies, and needed to expand their own business in order to compete on a global stage.

However, in the less than 2 months since the plans were made public, talks have completely fallen through. Failure can be attributed to a fatal miscommunication and misunderstanding of both parties; Honda is trying to obtain enough of a stake in Nissan to effectively make it an acquisition, something Nissan would like to avoid. This has led to huge power imbalances, and a lack of agreement on how much power each company is to have in their collective future, leading to both parties calling off the talks and leaving empty handed.

There are many routes for the future of these companies, depending on the action each company takes. Honda has suggested talks could be restarted- on the condition that Nissan’s CEO steps down and resigns from the position, and is replaced by someone who is more open to Honda’s vision of an acquisition of Nissan.

Despite that, there are still glaciers ahead; there are still numerous other parties that could possibly sink the ship. Notably, regulators not just from Japan, but from other regions where both companies maintain a relevant presence in, such as the US and EU.

Alternatively, both companies may look to merge with different companies. Taiwan’s Foxconn and France’s Renault have been mentioned as companies that look to acquire Nissan, and provide them with enough finances to keep them afloat.

Despite the failures of the Nissan-Honda merger, it still seems to be that Japan will give way to a giant reborn into a new form. What that giant consists of is still to be determined, and the world can only look at what the next evolutionary form of these two companies will be.

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