Japanese automakers Nissan and Honda were in talks regarding a massive merger to the bill of $60 billion that would have transformed the face of the car industry. The deal was meant to prove a competitive advantage to both automakers in the surge of the Chinese EV industry and it would have been one of the biggest automakers across the globe. However, due to breakdown and disagreements among the company’s board members and their strategic differences, their talks fell apart in just about a month.
What Went Wrong in the $60 Billion Deal?
Nissan was offered a lifeline by Honda at a time when it was suffering in the market and engulfed by turmoil. Tensions arose when Nissan pressed for equal treatment in the deal given that Honda now had the upper hand. However, Honda was demanding deeper job and factory cuts which Nissan avoided due to political and financial considerations.
In a critical turn of events, Honda surprisingly came with the terms proposing that instead of being an equal partner, Nissan should become a subsidiary. This move was perceived as smugness by Nissan’s management and it opened the door for CEO Makoto Uchida to call off talks.
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Renault, Nissan’s biggest shareholder also opposed the deal stating that it’s a “takeover” rather than a merger.
With the merger now off, Nissan finds itself again in an uncertain future. It is exploring alternative partnerships with a potential alliance with Taiwan’s Foxconn being on the table.
