Honda and Nissan Officially Scrap $60 Billion Merger, Unable To Come to an Agreement

Troubled merger talks between Honda and Nissan — and by extension, Mitsubishi and Renault, who are involved in a triple alliance with Nissan, as Ars Technica detailed — have come to an end.

The conclusion? The planned merger, worth about $60 billion according to Top Gear (or $50 billion per Business Insider), has officially been scrapped.

Nissan CEO Makoto Uchida made it clear that Honda’s desire to make Nissan a subsidiary rather than something more like an equal partner was at the heart of the dissolution of talks between the two companies.

“While both companies have a long history, we were not sure whether this would reflect our autonomy or allow us to demonstrate our potential or strength,” he said during a press conference.

Reuters took a deep dive into the inner workings of the deal, including the particulars of its eventual failure. Honda was unwilling to concede any portion of its aggressive bargaining position, seeking to bring Nissan in as a subsidiary. One source apparently familiar with Nissan’s thinking argued that Honda never considered Nissan an equal, and two other sources claimed that Honda was aggravated with a perceived lack of detail concerning Nissan’s turnaround strategy as well as an insufficient reduction in factory capacity.

What’s Next for Nissan and Honda After Merger Failure?

While Nissan’s stock has plummeted by about 25% over the course of the past year (and Honda’s dipped 15%), Uchida appears set to slash the company’s headcount in an effort to execute a drastic turnaround plan.

“Given the latest performance of the company and the changing environment, it is essential to explore all the options without taboo and carry out a deeper structural reform,” Uchida said.

Nissan is in dire financial straights, Business Insider reported. Profits cratered during the nine months ending December 2024 to $33 million, down from $2.1 billion during the same time frame the year prior. As such, the company is scrambling for investors. The chairman of Foxconn indicated an interest in acquiring Renault’s 36% stake in the automaker, and private equity firm KKR is allegedly also considering buying in.

Honda is facing some significant headwinds as well, although it is in a much more enviable position than its counterpart. Increased tariffs applied to Canada and Mexico would represent a substantial blow to Honda’s fortunes, as it operates a number of manufacturing plants in both nations. Further, its business in China has tumbled by 40% in the nine-month period headed into last December.

However, Honda’s future looks bright on a broad scale, as it reported a 25% uptick in pre-tax profit during the last quarter. Particularly healthy U.S. sales and its strong motorcycle division helped to buoy the automaker’s bottom line.