Potential Japanese car giant falters? Nissan executives reluctant to take subsidiary position as current proposal talks with Honda appear to stall: reports

A proposed merger between Honda and Nissan, with the potential to create the world’s third biggest carmaker, appears to have stalled, with the main point of contention being Nissan’s reluctance to accept ‘subsidiary’ status as part of the deal.

According to Bloomberg sources close to the discussions confirm Nissan’s current position “could jeopardize talks between the two carmakers to join forces”.

Following initial talks in March 2024, Honda and Nissan put the operational wheels in motion by signing a memorandum of understanding (MOU) last December, with the possibility that Nissan’s Alliance partner, Mitsubishi, could join the party in a collective bid to conquer increased competition, especially from emerging Chinese challenger brands.

Nissan’s board is scheduled to meet today at the company’s Yokohama HQ where, according to Bloomberg’s sources, it appears likely to vote down Honda’s proposal to buy Nissan’s shares and make it a subsidiary.

For context, Honda’s 7.3 trillion yen ($76 billion) valuation is nearly five times higher than Nissan’s and there is no appetite from the latter’s other Alliance partner, Renault (which owns 36 per cent of Nissan), to enter these ‘merger’ talks.

Rather, the French giant is said to be primarily concerned with Nissan extracting a premium for its stake if Honda takes control.

Officially, Honda and Nissan continue to work towards mid-February (delayed from late January) for release of a combined framework, but the Nissan board’s allegedly mixed sentiment in response to Honda’s offer could still throw a spanner in the works.

Target timing for the announcement of a final structure is June this year with a listing of shares in a joint holding company scheduled for August 2026.

It's worth noting other regional outlets including the The Asahi Shimbun and Nikkei Asia have reported that the two companies are on the edge of calling it quits, so this week’s Nissan board discussions are clearly critical to the deal’s ultimate success. Stay tuned!