This merger was to shake the market. However, two big companies did not get along?

Luc Williams

Honda and Nissan, which in terms of production volume occupy second and third in Japan, announced the desire to join forces last year – reminds Reuters. As a result of the merger, the third largest sales manufacturer in the world was to be created. The Japanese manufacturers’ movement was to strengthen the industry, which is in the face of a huge threat from Chinese BYD and other participants of the electric vehicle market.

Unfortunately, the conversations are not going well. In this situation, Nissan withdraws the merger with Honda – says the Japanese daily Dziennik Nikkei. The decision of the smaller of the ground floor raises questions about the company’s ability to leave the crisis independently.

How is the company’s response to press reports?

According to Reuters, Nissan spokesman said that Nikkei’s report is not based on the information announced by Nissan. “Our goal is to finalize our direction of activities until mid -February and we will announce it at that time” – he said.

Meanwhile, a spokesman for Honda said that Nissan did not provide Honda with any information regarding the decision to withdraw from the cooperation agreement.

The nervous reaction of the stock exchange

After the announcement of the Japanese Dziennik Actions report Nissana fell by more than 4 percent, before the Tokyo stock exchange suspended trade in the company’s shares. At the same time the values Honda increased by over 8 percentwhich is a sign of the explicit relief of investors in connection with the cancellation of the transaction.

What next with Nissan?

According to the information that the Reuters agency has reached, it follows that Honda probed the issue of transforming Nissan into a subsidiary. Such a solution would be a departure from the spirit of conversations, which originally assumed a fusion of equal entities.

“Information that Nissan did not want to become a subsidiary of Honda, It seems to indicate that the dispute concerned the issue of control over a smaller partner, “said Reuters Christopher Richter, a senior automotive market analyst in Japan at the CLSA brokerage house.

In this situation, the question arises about it Can Nissan survive the crisis without external help. Reuters reminds that Nissan is in the course of the implementation of the recovery plan whose goal is dismissal of 9,000 employees and reduction of 20 percent global production capacity. Honda, whose market value is almost five times higher than the value of Nissan, is increasingly concerned about the progress of a smaller rival in the implementation of the recovery plan.

About LUC WILLIAMS

Luc's expertise lies in assisting students from a myriad of disciplines to refine and enhance their thesis work with clarity and impact. His methodical approach and the knack for simplifying complex information make him an invaluable ally for any thesis writer.