Nissan withdraws from Honda merger talks amid disagreements

Nissan to decline Honda buyout

Nissan’s primary objection stemmed from Honda’s proposal to make it a subsidiary rather than forming an equal joint holding company. While some Nissan board members were open to Honda’s offer to buy out Nissan shares, the majority opposed the move, advocating instead for a partnership on equal terms. As a result, Nissan has stepped back from discussions, which,.

On February 6, 2025, Nissan CEO Makoto Uchida met with Honda CEO Toshihiro Mibe in Tokyo to communicate Nissan’s intention to withdraw from the talks. Although both automakers issued a joint statement clarifying that media reports were not officially announced by them, they plan to establish a clear direction and make an official announcement by mid-February.

Read More: Why Mitsubishi stepped out of the merger.

Nissan’s complicated relationships

Mitsubishi considered participation before ultimately deciding to remain independent. However, Honda also proposed acquiring Nissan’s shares outright rather than forming a joint entity. This followed Honda’s inquiry in January about Nissan’s ability to purchase Renault’s remaining stake, citing concerns over foreign influence amid ongoing discussions.

Meanwhile, Nissan is reportedly exploring alternative partnerships, including a potential collaboration with Taiwanese electronics giant Foxconn. Foxconn previously approached Nissan in December 2024, prior to the formal announcement of Honda-Nissan merger talks.

Honda-Nissan merger potential

In December, Honda and Nissan announced their goal of finalising a mutual agreement by June 2025. If approved, the merger would have resulted in a joint holding company listed on the Tokyo Stock Exchange by August 2026. Honda CEO Toshihiro Mibe emphasized that the merger was not designed to rescue Nissan, though Nissan needed to implement a successful turnaround strategy. Honda’s market valuation, standing at approximately 7.3 trillion yen (AUD 76 billion), is nearly five times larger than Nissan’s, which entered “emergency mode” in late 2024 due to financial struggles and declining global sales. If successful, the merger would have led to the creation of the world’s third-largest automotive group behind Toyota and Volkswagen.

Read More: The beginning of merger conversations.

What’s next for both?

The breakdown in talks has had immediate market repercussions. Honda’s shares surged by more than 8% on the Tokyo Stock Exchange, while Nissan’s declined by over 4%. Another complication in the discussions was the potential impact of U.S. tariffs on Mexican imports under President Donald Trump’s administration. Nissan, which exports more vehicles from Mexico to the U.S. than Honda, would face a greater financial burden.

Further details on the merger, initially expected in late January, have been delayed to mid-February. With merger talks stalling, Nissan is now focused on securing new strategic alliances, while Honda reassesses its approach to expansion in the global automotive industry.