Nissan CEO says it will be ‘difficult to survive’ without partnerships after Honda merger collapses

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Nissan CEO says it will be ‘difficult to survive’ without partnerships after Honda merger collapses

The big merger between Nissan (NSANY) and Honda (HMC) is no more.

In a statement on Thursday, the boards of both companies said they decided to mutually terminate their memorandum of understanding signed last August for a proposed tripartite deal that would have included Mitsubishi as well.

Honda and Nissan claim they will form a strategic partnership to collaborate on electric vehicles and other technologies, but the loss of the deal is a huge blow to Nissan — and even Honda.

Honda CEO Toshihiro Mibe tried to strike a positive tone at a media briefing. “While the outcome is unfortunate, we now have a mutual appreciation of our synergies that can be utilized in our existing strategic partnership.”

Nissan CEO Makoto Uchida was more blunt about what the future holds for Nissan without a major partner. “It will still be difficult to survive without leaning on future partnerships,” he said.

Honda US-listed shares were trading higher on Thursday, while Nissan shares in Japan slipped.

Despite both Honda and Nissan’s desire to make a deal, the two Japanese icons have their own cultures and reputations, which may have led to the deal’s unraveling, per some reports. Honda, in the more enviable position, looked at Nissan as a troubled partner that needed more cost cuts, which apparently did not happen at the speed Honda desired.

Honda was also concerned a merged entity would not be nimble enough to respond to a rapidly evolving auto market.

“We need to be speedy, and we thought this structure [where both brands operated under a new holding company] wouldn’t function well to achieve that objective,” Mibe said at the briefing.

Honda then reportedly wanted to make Nissan a subsidiary, which Nissan wasn’t going to allow. Nissan felt like a subsidiary with its alliance partner Renault (RNO.PA), and the company

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in some fashion to this day.

Nissan Motor CEO Makoto Uchida speaks during a press conference on Thursday in Yokohama, Japan. (Tomohiro Ohsumi/Getty Images) · Tomohiro Ohsumi via Getty Images

“With the proposal suggesting Nissan would become a wholly owned subsidiary, we were not confident that our autonomy would be preserved or Nissan’s potential could be truly maximized,” Nissan’s Uchida said.

Even Renault

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, claiming there wasn’t enough premium paid for its Nissan shares.

Honda ruled out a nuclear option as well, claiming a hostile takeover was off the table.

Nissan is left with few options at this point. Taiwanese device maker Foxconn said it was interested in an investment with Nissan in order to build out its EV production capabilities.

“If cooperation requires [purchasing Nissan shares], we will consider it,” Foxconn chairman Young Liu

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. Liu was quick to add that Foxconn desired cooperation, not that it needed to buy shares to achieve this outcome.

Story Continues

FILE – Visitors look at a series of Foxconn’s Foxtron electric cars during the Hon Hai Tech Day (HHTD 24) at the Nangang Exhibition Center in Taipei, Taiwan, Oct. 8, 2024 as Foxconn showcases its latest electric car and other technology products. (AP Photo/Chiang Ying-ying, File) · ASSOCIATED PRESS

Big Tech as a partner is new, but it could be the future for the automakers.

“As technology advances players may need to consider more steps towards manufacturing ‘robots on wheels’ rather than combustion engine vehicles, it could well be the case that Big Tech companies and electronic components manufacturers — such as Foxconn — become crucial partners in automotive M&A,” said Lucinda Guthrie, head of financial analytics firm Mergermarket.

Nissan may have another suitor waiting in the wings, however. Per a new Bloomberg report, private equity firm KKR is considering investing in Nissan, with talks ongoing.

While KKR or Foxconn wouldn’t be the major partner Nissan requires, smaller deals with fresh injections of cash are certainly needed. On Thursday, Nissan cut its annual profit forecast for the third time as fiscal Q3 profit fell 78% from a year ago.

Meanwhile, Honda maintained its operating profit and profit forecasts for its fiscal year ending on March 31.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him on

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