Nissan, Honda respond to reports of potential merger being scrapped

Published On Feb 5, 2025, 3:10 PM

Nissan and Honda are in discussions regarding a potential merger, but reports indicate that Nissan may be considering backing out due to unacceptable terms put forth by Honda. Nissan has said it plans to finalize its decision on the merger's direction by mid-February. Meanwhile, Honda remains in discussions without providing further details. If successful, the merger could create the world's third-largest auto manufacturer, enhancing their competitive edge.

Stock Forecasts

HMC

Negative

Honda's ongoing talks could indicate a strategic approach to maintain competitiveness, but if Nissan withdraws, Honda may face challenges in market perception. Investors might react negatively in the short term due to the merger uncertainty affecting Honda's long-term strategy and growth prospects.

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Honda and Nissan expect big benefits from their potential merger to create the world's third-largest auto group but intense competition from China raises questions about whether they can make it work in time. While the outcome is not certain and will depend partly on troubled Nissan making progress in its turnaround, they aim to finalise the deal by August 2026. Nissan's junior partner, Mitsubishi Motors, will decide by next month whether it plans to take part.