Nissan cancels merger agreement with Honda due to disputes

In December 2024, Nissan and Honda entered into a groundbreaking agreement to create a joint holding company, in which both would become subsidiaries. The merger aimed to improve competitiveness in the electric vehicle sector and address Nissan's weak governance. However, the deal has now effectively collapsed, with Nissan retracting the memorandum of understanding (MOU). The primary issue arose when Honda suggested transforming Nissan into a subsidiary to gain control of Nissan’s restructuring process. Nissan strongly opposed this move, considering it unacceptable.

Honda’s proposal was a response to delays in Nissan's restructuring plans, which were causing frustration within Honda. While Nissan has resisted being reduced to a subsidiary, Honda may turn its focus toward a merger with Mitsubishi Motors instead. Both companies are seeking to survive in an increasingly competitive automotive industry. If the merger talks fail, they will have to reconsider their future strategies, especially in the rapidly changing landscape of electric vehicle production.

Read more about Nissan and Honda's complicated merger talks.