Honda Nissan merger - part 3 - things get complicated

EV News World Jan 24 2025. Honda Nissan Merger Update — Things Get Complicated
Here I discuss the important article from 18 Jan 2025 from Steve Hanley from CleanTechnica.com. To keep you up to date on the context and developments on the Honda Nissan merger plans.

Article summary: Honda and Nissan have announced their intention to merge, but now face some hurdles to overcome before the deal can move forward. The main issue is Nissan's relationship with Renault, as Honda wants it resolved before proceeding with the merger. Honda has asked Nissan if it would be able to buy Renault's 35.7% stake in the company, which is worth about 557 billion yen. Honda fears that if Renault is acquired by a third party during negotiations, Nissan could fall under undesirable foreign influence. In the past, there were rumors that a Taiwanese company was interested in acquiring Nissan, which would be unacceptable to the Japanese government.

In addition, there is the question of the funds needed to buy Renault's stake. Nissan has been experiencing financial difficulties and its market value has declined considerably. The company has announced layoffs and a reduction in its production capacity. Currently, its operating income is expected to be reduced by 70% and there is practically no growth for the year. Given this situation, many are wondering what Honda is getting out of this deal and what strategic benefits are expected. Renault, although it has a financial interest in the outcome, has not been mentioned in detail in the merger announcements.

Another obstacle is the partnership of both companies with Chinese manufacturer Dongfeng Motor. Honda and Nissan work with Dongfeng in the Chinese market, both in vehicle manufacturing and electric car development. Harmonizing the development costs of both vehicle lines is a challenge, as Honda has its own brand in China and competes with cars jointly developed by Dongfeng and Nissan. Although Honda and Nissan have held merger talks, they have not yet reached a conclusion on how they will resolve the issues related to Dongfeng.

In short, Honda and Nissan face obstacles in their merger plan. Honda wants Nissan to resolve its relationship with Renault before moving forward, as they fear unwanted foreign influence. In addition, there is the issue of the funds needed to acquire Renault's stake. The partnership with Dongfeng in China is also complicated, as Honda has its own brand in the country and competes with vehicles jointly developed by Dongfeng and Nissan. Although no conclusion has yet been reached on these issues, Honda and Nissan plan to announce the details of their agreement later this month.
Source:
https://cleantechnica.com/2025/01/17/honda-nissan-merger-update-things-get-complicated/
Hector Vladimir 2025©
EV News World
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