Honda and Nissan have decided to terminate their discussions about a potential merger due to disagreements on management structure and company valuation. Executives at Nissan were reluctant to oversee what would have become a Honda subsidiary, and analysts saw little synergy between the two firms. Following the breakdown of talks, both companies agreed to collaborate instead on a strategic partnership related to the electrification of vehicles. While Honda reports increasing profits, Nissan is in a difficult financial situation, planning significant job cuts and factory closures as part of its turnaround strategy.
Both companies concluded that, to prioritize speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate the [memorandum of understanding].
Going forward, Nissan and Honda will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles, striving to create new value and maximize the corporate value of both companies.
Honda just reported a 6 percent increase in its operating profits this past quarter and is unlikely to falter with the failure of this deal.
Nissan remains in a precarious position, though. It has lost money for the last two quarters and today announced a turnaround plan that includes cutting 9,000 jobs.
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