Nissan, Honda end merger deal as negotiations fail

ISTANBUL

Honda and Nissan have announced that they have canceled their merger plans as the talks between the two companies collapsed, Nissan announced in a statement on Thursday.

"Nissan, Honda, and Mitsubishi today agreed to terminate their MOU (memorandum of understanding) regarding the consideration of the structure for a tripartite collaboration, in light of the termination of the MOU signed on December 23 last year regarding the consideration of a business integration between Nissan and Honda," the statement said.

"Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles," it added.

The merger talks, which began in December, collapsed due to a host of disagreements including Honda's proposal that Nissan become a subsidiary, according to the Kyodo News Agency.

When they announced their intention to initiate merger negotiations at a news conference in December, Honda stated that ailing Nissan would have to increase its turnaround efforts as a condition for the acquisition.

In November, Nissan said that it would lose 9,000 positions worldwide and lower global manufacturing capacity by 20%.

However, Nissan's proposals failed to persuade Honda that the struggling automaker is on pace for a successful recovery, according to individuals familiar with the situation.

The merger talks, if they were successful, would have created the world's third-biggest automaker by volume.