Nissan is set to abandon talks with rival Honda, putting the $60 billion merger in doubt, Reuters reports.
Negotiations between the two Japanese automakers have been complicated by growing disagreements, according to several people familiar with the matter. It remains to be seen whether the merger can survive.
Honda, whose market value of about 7.92 trillion yen ($51.90 billion) is more than five times that of Nissan (1.44 trillion yen), is increasingly concerned about the progress of its smaller rival.
Nissan shares fell more than 4 per cent on the Tokyo Stock Exchange, which temporarily suspended trading in the stock after the Nikkei business daily reported the carmaker was pulling out of talks. Honda shares, meanwhile, rose more than 8 per cent, a sign of investor relief.
However, both automakers said in separate statements that the Nikkei report was not based on information announced by the companies and that they intend to finalise the future direction by mid-February. Nissan’s long-term alliance partner, French carmaker Renault, is expected to “vigorously” protect the interests of the group and its stakeholders.
Renault, which owns 36 per cent of Nissan, including 18.7 per cent through a French trust, has previously said it was open to a merger. The possible cancellation raises questions about how Nissan, which is set to cut 9,000 employees and 20 per cent of global capacity, will survive its latest crisis without help from outside.
Nissan’s smaller alliance partner Mitsubishi Motors, which had been considering joining the merger, may also change its mind.
