Nissan shares collapse amid refusal to merge with Honda
By ForGeeks Nissan’s share price fell significantly on Feb. 5, 2025, following reports that the company is abandoning merger talks with Honda. The Tokyo Stock Exchange temporarily suspended trading in Nissan shares to verify these reports, which were published by the Nikkei daily business newspaper and other publications.
The Tokyo Stock Exchange temporarily suspended trading in Nissan shares to verify these reports, which were published by the Nikkei business daily and other publications.
Nissan shares fell 4.8% before the trading halt, while Honda shares rose 12%.
Some background on the two companies’ talks: merger talks began in December 2024, with the goal of creating the world’s third-largest automaker.
What are the reasons the merger was rejected?
Nissan strongly opposed the idea of becoming a subsidiary of Honda because it would have resulted in a loss of management control.In addition, there was considerable internal opposition to Honda’s proposal, and executives said such a move would be unacceptable. Plus Honda’s dislike of Nissan’s slow progress in implementing restructuring plans exacerbated the disagreement. Honda sought greater control over Nissan to ensure an effective restructuring.
Honda’s proposal was not an option.
If the merger of the two carmakers fails to materialize, pressure on Nissan will intensify. Management will have to convince creditors, employees and customers that the company can survive in a fiercely competitive market.
The company’s management will have to convince creditors, employees and customers that it can survive in a highly competitive marketplace.
