Nissan and Honda have canceled their planned $50 billion merger, citing a need to prioritize speed of decision-making and execution of management measures in an increasingly volatile market. The Japanese automakers said they would continue to work within a strategic partnership.
The deal’s collapse comes as both companies face declining sales and a slow transition to electric vehicles (EVs). Nissan CEO Makoto Uchida stated that Honda’s desire for his company to be a subsidiary rather than a partner played a key role in the merger’s demise. The automaker is now racing to execute a turnaround plan, which includes cutting 9,000 jobs globally.
Nissan plans to cut 6,500 jobs at its factories in Tennessee, Mississippi, and Thailand, as well as reduce global vehicle production by 1 million to 4 million in the 2026 financial year. The company also faces a looming tariff headache from potential US tariffs on vehicles imported from Mexico and Canada.
Honda recently reported a 25% rise in pre-tax profit in its latest quarter, driven by strong US sales and its high-performing motorcycle business. However, the automaker still faces challenges in China, where sales collapsed almost 40% in the nine months to December. Nissan’s profits, on the other hand, crashed to $33 million for the same period, and the company projects an annual loss of $519 million.
The breakdown of the Honda deal leaves Nissan looking for investment elsewhere. Foxconn is considering buying a stake in Nissan, while private equity firm KKR is also exploring an investment opportunity.
Source: https://www.businessinsider.com/nissan-honda-call-off-50-billion-merger-2025-2