Automakers Nissan Motor Co. and Honda Motor Co. have decided to call off merger talks announced a few months ago over differences in the structure of the process.
The two auto companies, ranked second and third among Japan’s largest automakers respectively, did not come to good terms.
“Honda proposed to acquire a majority of Nissan’s shares, making it its subsidiary, which was a departure from the initial concept of a merger between equals.” The proposal was enough to make Nissan decide to withdraw from the negotiations.
Consequently, its shares fell by more than 4% before the Tokyo Stock Exchange suspended trading. In contrast, Honda shares rose by more than 8 %.
Nissan is known to be “facing significant financial challenges.” Last year, it announced a 20 % reduction in its global production capacity and cut 9,000 jobs worldwide. The cancellation of the merger raises questions about its ability to deal with these challenges, which extend to the entire Japanese industry.
M.Pino
Source: publimetro
(Reference image source: Scott Graham on Unsplash)
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