WEBDESK (Azaad English): The Nissan and Honda merger deal, for a potential $60billion, collapsed on Thursday because of disagreements over the balance of power.
The talks between Honda, Japan’s second-largest carmaker, and Nissan, Japan’s third, were announced in December. The talks, however, soon ended because of disagreements over the balance of power.
The deal apparently fell through after Honda’s proposal to make Nissan a subsidiary. The proposed deal would have made Honda the parent company, with Nissan acting as an extension of the company.
However, the car companies said that they would continue with their earlier agreement, which also includes Mitsubishi Motors, to cooperate on technology and other areas.
The two companies, Honda and Nissan, have seen their industry and the key China market shift due to the rapid rise of Chinese electric vehicle makers, such as BYD Auto. They also face the threat of tarrifs in the US, another key market.
If the deal had gone through, it would’ve been worth over $60 billion, creating the world’s third-largest automaker behind Hyundai, Volkswagen, and Toyota.
This puts Nissan into further uncertainty, highlighting their recent struggles since the arrest of their former chairman, Carlos Ghosn. Nissan on Thursday cut their full-year forecase for a third time and reported another big drop in third-quarter earnings.
Following the collapse of the Honda and Nissan merger deal, Nissan has already started to look elsewhere, with Taiwan’s Foxconn seen as a potential candidate.
Foxconn Chairman Young Liu said on Wednesday it would consider taking a stake in Nissan but that its main aim was cooperation.
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