As per the Bloomberg report, Nissan has scrapped its plan to form a merger with Honda, and looking forward to a potential partnership with a US-based technology firm. Nissan’s merger fell apart over disagreements about the structure of the proposed deal including details on investment amounts and changes to operations. Nissan’s stock rose about 8% on Thursday as investors responded positively to the chance of a more competitive global partnership.
Ending exclusive talks with Honda would allow either company to back out of the deal without facing the hefty ¥100 billion ($657 million) cancellation fee, as outlined in their December 23 agreement.
Nissan Eyes Potential Partners
With Honda out of the picture, Nissan’s leaders are facing more pressure to find a new partnership that can give them the tech advantage needed to stay competitive in the fast-changing auto industry. North America is the most critical market for Nissan, making a US-based technology firm most suitable for partnership. Nissan is urgently looking for a new partner as it needs to update its operations and boost its electric vehicle capabilities.
As the industry shifts towards electrification and automation, many automakers are teaming up with tech companies to gain an edge in AI, battery tech, and self-driving cars. Speculations are increasing about the next potential partner of Nissan.
Is Foxconn a Potential Partner For Nissan?
Foxconn, also known as Hon Hai Precision, had shown interest in partnering with Nissan but paused talks when discussions with Honda moved forward. Now that those talks are over, Foxconn may rejoin the conversation.
The electronics giant has been expanding into EV production and could bring Nissan key supply chain benefits.
Why Nissan and Honda Merger Fell Apart?
Earlier, Honda and Nissan proposed the merger to compete against Chinese EV makers like BYD. As per reports, from the start internal disagreements were growing which finally put a strain on talks. One of the major disagreements was about Honda’s proposal to turn Nissan into a subsidiary, which was opposed significantly by the latter.
Honda, Japan’s second-largest carmaker, has become doubtful of Nissan’s ability to make a successful comeback, given its market value is nearly five times larger. Still recovering from the 2018 scandal with former Chairman Carlos Ghosn, Nissan has struggled to keep up with the fast shift to electric vehicles.
Nissan Stock Update
Nissan’s stock had a good week, rising 7.42% to close at 445.90. This contrasts with the drop in stock price following the failed Nissan-Honda merger, which hurt investor confidence and caused a decline in Nissan’s value.
