Honda ready to resume Nissan takeover talks, but on one condition

Honda is ready to revive takeover talks for Nissan after the proposed merger of the two Japanese auto giants was thrown into doubt earlier this month, only weeks after talks began. However, in an interesting move, Honda has now stated that it is willing to resume the takeover talks to form what could be the world's fourth biggest carmaker, provided Nissan CEO Makoto Uchida steps down.

Last week, the proposed merger discussions between Honda, which is the second largest automaker in Japan and Nissan, the third biggest in the country, collapsed. This ended the plans of creating a car manufacturer that could be worth over $60 billion. The two auto companies were unable to agree on terms, which resulted in Honda withdrawing itself from the proposed deal. This setback plunged Nissan into further uncertainty and highlighted the pressure on legacy automakers from their Chinese rivals who have been disrupting the global auto industry.

However, now, according to a report by Financial Times, Honda has taken a 180-degree turn on its stance but given a condition as well. The report also claimed that Honda is willing to revive negotiations under a new boss who can more effectively manage internal opposition. Interestingly, Uchida had been one of the strongest advocates within Nissan for a deal with Honda. However, relations between the Nissan CEO and Honda CEO Toshihiro Mibe deteriorated lately as the latter became frustrated with the speed of Nissan’s restructuring and the depth of its financial troubles.

The FT report further stated that Uchida had expressed his intention to stay until 2026, but is now facing pressure to step down in the coming months from board members and Nissan's current alliance partner Renault as well, following his mismanagement of negotiations for a $58 billion megadeal. Nissan's board of directors has also reportedly started informal discussions regarding the timing of Uchida's departure.

Honda-Nissan merger: What was the dealbreaker?

The proposed merger discussions between Honda and Nissan broke down earlier this month after the former demanded that Nissan become a fully owned subsidiary of it instead of establishing a new holding company, where the two automakers would have an equal footing. This proposal was a departure from the initial plans made public on December 23 to establish a joint holding company and was met with strong opposition within Nissan.

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