TOKYO, Feb 14 (NNN-NHK) – Honda Motor Co. and Nissan Motor Co., yesterday, announced the decision to terminate discussions on a potential merger, bringing an end to the restructuring attempt, that could have created one of the world’s largest automotive group.
Both companies held board meetings yesterday, where they agreed to withdraw the basic agreement, signed in Dec, last year, and officially end merger discussions.
In the rapidly changing market environment, in the age of electrification, prioritising decision-making speed and the execution of management measures would make it more appropriate to forgo the merger at this time, Nissan said in a statement, on its website.
Moving forward, the companies will continue to collaborate within the framework of the strategic partnership memorandum, the two companies said in separate statements.
Honda will hold an online press conference at 4:50 p.m. local time (0750 GMT), regarding details of the decision.
The two companies initially focused on forming a holding company, that would oversee both brands, but negotiations stalled over the shareholding structure, as tensions escalated when Honda proposed making Nissan its subsidiary, an idea Nissan strongly opposed.
According to local media, Honda has been pushing Nissan to accelerate its restructuring efforts. In Nov last year, Nissan announced plans to cut 9,000 jobs worldwide, and reduce its global production capacity by 20 percent, after reporting a more than 90 percent drop in net profit for the Apr-Sept period.– NNN-NHK
