A proposed tripartite deal between Nissan (NSANY), Honda (HMC), and Mitsubishi has fallen through due to cultural clashes. The two Japanese automakers had signed a memorandum of understanding last August, but their boards have now decided to mutually terminate the agreement.
Honda CEO Toshihiro Mibe stated that while the outcome is unfortunate, the companies can utilize their synergies in their existing strategic partnership. Nissan CEO Makoto Uchida warned that without significant partnerships, it will be difficult for Nissan to survive.
Cultural differences between Honda and Nissan may have contributed to the deal’s failure. Honda viewed Nissan as a troubled partner requiring cost cuts, which did not happen at the speed Honda desired. Honda also feared a merged entity would struggle to respond quickly to an evolving auto market.
Nissan rejected Honda’s proposal for it to become a subsidiary of Honda, citing concerns over autonomy and potential maximization of Nissan’s capabilities. Renault, Nissan’s existing alliance partner, also expressed reservations about the merger terms.
With the deal off the table, Nissan is exploring alternative partnerships, including a potential investment with Taiwanese device maker Foxconn to boost its electric vehicle production capabilities. Big Tech companies like Foxconn could play a crucial role in the future of automotive M&A.
Nissan’s shares fell on Thursday, while Honda shares rose as investors took a more positive view of the company’s prospects. Private equity firm KKR is also reportedly considering investing in Nissan, providing the company with much-needed capital to address its financial challenges.
Source: https://finance.yahoo.com/news/nissan-ceo-says-it-will-be-difficult-to-survive-without-partnerships-after-honda-merger-collapses-184244494.html