According to a source on Wednesday, Nissan is planning to end merger negotiations with rival Honda, ending a $60 billion+ deal that would have made it the third-largest carmaker in the world and casting doubt on its ability to turn things around on its own.
Growing divisions between the two Japanese automakers have hindered talks, according to two people familiar with the situation who asked not to be named because they were not permitted to speak to the media.
Following a Nikkei Business Daily article indicating that it will pull out, Nissan’s stock fell more than 4% on the Tokyo Stock Exchange, which momentarily halted trading in the stock. As a sign of apparent investor relief, Honda shares continued to trade and ended the day up more than 8%.
The move will cast new doubt on Nissan’s ability to weather its most recent crisis without outside assistance. The company is now implementing a recovery plan that calls for the company to lay off 9,000 workers and 20% of its global capacity.
In an industry that is being severely threatened by China’s BYD and other electric vehicle entrants, Honda, Japan’s second-largest automaker after Toyota, and Nissan, its third-largest, said in December that they were in negotiations to become the third-largest manufacturer in the world by sales.
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