Honda, Nissan at odds as deal to combine begins to unravel

The companies are discussing all options, including the possibility of withdrawing from talks, both said in statements Wednesday after the Nikkei reported that Nissan was pulling out.

Honda Motor Co.’s plan to absorb Nissan Motor Co. is rapidly deteriorating after disagreements over the inherent power imbalance between the two legacy automobile brands led to a deadlock.

Nissan Chief Executive Officer Makoto Uchida told Honda CEO Toshihiro Mibe that he intends to end integration talks, the Asahi newspaper reported Thursday.

While Honda isn’t immune to growing competition in the global auto industry, without its help, it’s not clear how Nissan plans to overcome the deep financial troubles that inspired the tie-up in the first place.

The companies are discussing all options, including the possibility of withdrawing from talks, both said in statements Wednesday after the Nikkei reported that Nissan was pulling out.

Failure to combine with Honda could leave Nissan out in the cold. Its global standing has been falling for decades due to unpopular products, cratering profit and listless leadership. At ¥7.6 trillion ($50 billion), Honda’s market value is more than five times larger than that of Nissan.

When the two announced plans in December to pair up, they said they’d put forward a framework in late January, which has now postponed to mid-February, and then finalize the transaction in June before listing shares of a holding company in August 2026.

Both reiterated on Wednesday that they plan to announce an update on their direction later this month.

Friction emerged this week after reports said Honda floated the idea of acquiring Nissan and making it a wholly-owned subsidiary. That proposal was a departure from plans made public on Dec. 23 to establish a joint holding company and was met with strong opposition within Nissan.

Shares in Honda declined as much as 4.8% on Thursday morning after jumping 8.2% Wednesday. Nissan stock was trading up 2.1%.