Merger, yes. Subsidiary, no. Nissan is prepared to reject an offer that would simply make them a subsidiary Honda. The move could jeopardize further talks between the two carmakers.
Reports from Japan say that Nissan’s board would likely vote down Honda’s proposal to buy Nissan’s shares citing concerns that its autonomy under this arrangement could be undermined. It’s understood that some senior officials at Nissan still support Honda’s offer.
The board meeting could happen as early as today, February 5.
The two Japanese automakers have been in discussions for weeks on a combination that would effectively result in an acquisition of Nissan, as Honda’s 7.3-trillion-yen (USD 47 billion) valuation is nearly five times higher.
The talks to create the world’s third-largest carmaker have hit obstacles since the plans were first announced in December. At the time, the plan was to create a new holding company with both the Honda and Nissan brands part of that new company.
Both carmakers had pledged to put forward a framework for the transaction in late January, they’ve pushed that back on that deadline since.
Now, Honda seems to be dissatisfied with Nissan’s turnaround plan. Per Honda’s conditions, Nissan will need to earn the equivalent of roughly USD 2.6 billion in fiscal 2026 for the merger to go through. With Honda remaining unconvinced, they are now thinking of lifting some of Nissan’s weight by making it a subsidiary.
The friction between the two automakers could result in merger talks ending. This could put Nissan in uncertainty once more.
Prior to the merger announcement, Nissan said it would cut 9,000 jobs worldwide and reduce its global production capacity by 20 percent after it reported a more than 90 percent drop in net profit in the April to September period.
Nissan is now planning to offer early retirement programs to employees at its three U.S. plants and reducing its workforce in Thailand.
Additionally, Honda has reportedly asked Nissan to buy out Renault’s stake in the brand to fend off outside influence.
Mitsubishi Motors which has reportedly decided against joining the alliance, said earlier this week it would make a final decision once Honda and Nissan reach an agreement later this month.
So Honda wants to acquire Nissan. Good for Nissan to reject this. Nissan just needs to scale down for the time being.
ReplyDeleteScale Down = Bankruptcy
DeleteNissan’s hubris is at it again. None of this would be happening had Nissan just merged with Renault in the first place.
ReplyDeleteThere's breaking news that Nissan has walked away from the merger talks. Nissan's gonna Nissan, I guess.
DeleteLol. Good luck finding another Carlos Ghosn to save their sorry keisters again. No one’s crazy enough to take on that monumental role after what they did to the original.
DeleteThen let Nissan dies.
ReplyDeleteSo this makes Toyota both happy and based.
ReplyDeleteNissan needs more financial assistance from Dongfeng
ReplyDeleteHonda plans to turn Nissan into Daihatsu and Kia
Nissan needs cash flow so it can't be picky. Can it raise funds to be equal partners in the new holding entity? Can it even buy out Renault shares in Nissan before this merging with Honda?
ReplyDeleteNo, maybe in all honesty, I think Toyota could be the only carmaker to gain from the Nissan-Honda saga since its given that Toyota not only found experience with Subaru, Mazda, Suzuki and Isuzu, but also other car manufacturers especially to those outside Japan.
DeleteNissan is always in trouble, they've been there before, that's why Ghosn was hired to turn things around then the Jap board turn against him accusing Ghosn of financial impropriety. Nissan during his reign was doing fine. These are the red flags Foxconn should be wary about. There's just something in Nissan it attracts bankruptcy, bad feng shui perhaps?
ReplyDelete