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Honda Motor Co. and Nissan Motor Co. officially decided Thursday to withdraw from their merger talks.
The two companies made the decision at their respective board meetings to withdraw from the basic agreement they signed in December on starting talks for integrating their businesses.
They are expected to continue to consider a feasibility study of a partnership mainly in the field of electric vehicles, for which they signed a memorandum in August last year. However, the degree to which such a partnership can produce results without capital ties is unclear.
Honda’s proposal that Nissan become a wholly owned subsidiary was one trigger for the discussions being called off.
In March last year, the two companies signed a memorandum to cooperate on EVs and in other areas. In August, they announced specific measures for their cooperation, which included the sharing of key EV components and the mutual supply of vehicles, as well as collaboration on the development of next-generation “software-defined vehicles” that can improve their performance through software updates.
After further discussions on their collaboration, the two companies exchanged a basic agreement on the management integration in December. Honda President Toshihiro Mibe said at that time that the integration was “the most rational approach.”
However, Honda floated the possibility of making Nissan a wholly owned subsidiary earlier this year. This led Nissan to object to the business integration.
There still are many issues to be addressed, including whether Nissan, which faces the necessity of restructuring its operations due to poor business performance, will be able to keep up with the pace of the discussions that Honda seeks.
