Honda, Nissan Reconsider Merger Plans

Honda Motor Co. and Nissan Motor Co. are reconsidering their proposed merger, casting doubt on their efforts to create one of the world's largest automakers.

The companies, in separate statements on Wednesday, discussed various options, including withdrawing from deal talks. This comes after reports emerged that Nissan planned to pull out due to disagreements over terms.

A failed merger would be particularly detrimental to Nissan, which has been struggling financially and relies on Honda for support. Its market value is significantly lower than Honda's, indicating imbalances in the deal.

Honda shares rose while Nissan's fell following the news. Nissan's largest shareholder, Renault SA, also experienced a decline in shares.

Honda and Nissan plan to announce their decision on their future by mid-February. They had previously postponed a planned update on their potential integration.

Friction arose when Honda reportedly considered acquiring Nissan as a subsidiary, a departure from the previously agreed-upon joint holding company. This proposal faced resistance within Nissan.

Nissan's financial difficulties were highlighted in November when it reported a 94% plunge in net income. Honda's rescue plan aims to regain lost market share in the United States and China, but challenges remain in the electric vehicle (EV) segment.

Mitsubishi Motors Corp., another rumored alliance partner, indicated it would finalize its decision after Honda and Nissan reach an agreement.