Nissan and Honda End Merger Discussions

Nissan Chief Executive Makoto Uchida (L) and Honda Chief Executive Toshihiro Mibe pose for photographers during a joint news conference in Tokyo, Japan, on Dec. 23, 2024. Eugene Hoshiko/AP Photo

Automakers Honda and Nissan announced on Feb. 13 that they’re no longer considering a merger.

Executives from the companies said in 2024 that they had signed a memorandum of understanding to explore full business integration through the creation of a publicly listed joint holding company, which would serve as the parent of both Nissan and Honda.

In a joint statement on Thursday, the companies said the discussions resulted in the choice not to merge.

“To prioritize speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions,” they said.

Nissan CEO Makoto Uchida told reporters at a press conference on Thursday that the talks had shifted from establishing a joint holding company to making Nissan a subsidiary of Honda.

“The intent was to join forces to win in the global competition, but this was not going to realize Nissan’s potential, so I could not accept it,” he said.

Honda Chief Executive Toshihiro Mibe said in a separate briefing that Honda had suggested a stock swap to speed up decision-making.

“I am really disappointed,” Mibe said. “I felt the potential was great, but I also knew actions that would bring pain were necessary to realize that.”

Uchida said at the time that a merger would unite the strengths of the companies while Mibe said that a merger would help the companies “overcome challenging environmental shifts that the auto industry is facing.”

A merged company would have been one of the largest automotive firms in the world. There was potential for Mitsubishi, another Japanese auto company, to join.

The companies have been struggling in recent years. Honda reported Thursday that its April to December 2024 profits declined 7 percent to 805 billion yen ($5 billion). Nissan reported that its profits over the same period crashed to 5.1 billion yen ($33 million) from 325 billion yen ($2.1 billion), and it projected losses of 80 billion yen ($519 million) for the full fiscal year through March.

Mitsubishi reported earlier in February that its profit over the same period was 33 billion yen, down from 102 billion yen over the same timeframe in 2023.

In light of the termination of merger talks, the companies canceled the memorandum of understanding, which also included Mitsubishi, the companies said.

“Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles,” the companies said. “This framework was established with the MOU signed on August 1 last year, striving to create new value and maximize the corporate value of each company.”

The Associated Press contributed to this report.