Nissan set to withdraw from Honda merger talks, says report

Nissan is set to call off talks with rival Honda over a merger that would have brought together two of Japan’s biggest manufacturers, according to reports.

The two firms signed a memorandum of understanding to investigate merging their operations last December, with the intention to agree a final deal by June 2025. Under the agreement, the two brands would have remained separate but adopted shared platforms and powertrains, and merged many of their production operations. It would have created one of the world's largest car firms.

But leading Japanese newspaper Nikkei – which first revealed details of the talks last year – has now reported that Nissan will withdraw from the deal amid growing differences between the two firms on how the merger would work.

According to recent reports in The Financial Times, Nissan bosses were angered by an unexpected proposal from Honda that moved away from the plan to form a joint holding company and would have effectively made Nissan a subsidiary fully owned by Honda. Nissan sources cited by the FT claim it was presented as a “take it or leave it” offer.

Reports indicate that Honda suggested that deal because of its higher market capitalisation, with the valuation of the two firm’s respective assets understood to have been a key sticking point throughout the talks. Honda has a market capitalisation of around £31 billion, while Nissan is valued at around £8bn, and that is believed to have prompted Honda to seek taking a leading role in the deal, rather than the proposed 'merger of equals'.

French firm Renault, which currently holds a 36% stake in Nissan, is reported to have recently urged its Alliance partner to secure a better deal if Honda were to take a leading stake in any eventual tie-up.

Nissan shares dropped by more than 4% on the Tokyo Stock Exchange following the Nikkei report, while Honda’s share price rose around 8%.

Nissan and Honda released separate statements to Reuters saying that the Nikkei report was "not based on information announced by the companies", adding that they were aiming to "finalise a future direction" by mid-February.

James Attwood

Title: Acting magazine editor

James is Autocar’s associate editor, and has more than 20 years of experience of working in automotive and motorsport journalism. He has been in his current role since September 2024, and helps lead Autocar's features and new sections, while regularly interviewing some of the biggest names in the industry. Oh, and he once helped make Volkswagen currywurst. Really.

Before first joining Autocar in 2017, James spent more than a decade in motorsport journalist, working on Autosport, autosport.com, F1 Racing and Motorsport News, covering everything from club rallying to top-level international events. He also spent 18 months running Move Electric, Haymarket's e-mobility title, where he developed knowledge of the e-bike and e-scooter markets.