Nissan Set To Scrap Merger Talks With Honda, Rejects Subsidiary Status - Sources

TOKYO, Feb 6 (Bernama-Kyodo) -- Nissan Motor Co is set to end merger discussions with Honda Motor Co, rejecting Honda’s recent proposal to make it a subsidiary, just over a month after talks began on a deal that could have created the world’s third-largest automaker, Kyodo news agency reported.

According to a source familiar with the matter on Wednesday, the two automakers announced in December that they had agreed to explore a merger under a holding company by 2026 while maintaining their respective brands.

The move was aimed at cutting costs and sharing the rising financial burden of developing electric vehicles and software to compete with global rivals such as Tesla Inc. and China’s BYD Co.

However, sources said Honda, which has a larger sales volume and market capitalisation, recently approached Nissan about becoming its subsidiary -- a proposal that met strong opposition within Nissan.

The merger talks emerged as Nissan undergoes restructuring, with Honda reportedly seeking control due to concerns that Nissan’s prolonged struggles could impact its future, the sources added.

Nissan, however, fears that becoming Honda’s subsidiary would significantly undermine its autonomy.

At a press conference in December, Nissan CEO Makoto Uchida underscored that neither company would dominate the merger, stressing that both were to be on equal footing.

The two automakers are set to release their earnings results for the April-December period next week.

-- BERNAMA-KYODO