Honda Shares Rise Amid Reports of Nissan Merger Difficulty
Honda Motor's U.S.-listed shares are surging in premarket trading, fueled by reports that its planned merger with Nissan has hit a roadblock.
According to the Financial Times, citing sources close to the matter, Honda proposed a revised structure that would have placed Nissan under its complete ownership. This deviated from the initial agreement for a "merger of equals."
A Nissan spokesperson refuted the FT report, stating it did not originate from the company. The automaker aims to finalize its decision on the merger by mid-February.
Honda and Nissan initially announced their merger plans in December, intending to create the world's third-largest automaker by combining forces with Mitsubishi Motors. Mitsubishi is Nissan's largest shareholder.
A successful merger would have enabled cost-cutting and strengthened their position in the global automotive industry amidst increasing competition from Chinese electric vehicle manufacturers.
Honda and Nissan have collaborated in the past, particularly in the electric vehicle sector. Mitsubishi recently joined this partnership.
Honda shares have experienced a decline of approximately 18% over the last year.