As new details about the proposed merger between Honda and Nissan emerge into the spotlight, it might not be as equal as some anticipate with more evidence pointing to Honda taking a firm leadership role.
Several new reports suggest the proposed merger between Honda and Nissan might not be as equal as expected.
Honda and Nissan shocked the world when the two companies confirmed that they were looking to merge into a new entity that would become the third largest automaker in the world. Both companies are behind in EV development but Nissan is also fighting for survival with the company seeing the merger as an unexpected and welcome lifeline to help it survive its latest round of internal strife.
However, all has not been smooth sailing with early obstacles including Mitsubishi’s flakey commitment to the merger and Honda reportedly demanding that Nissan buy out Renault’s stake in the existing Nissan and Renault partnership. However, a new report suggests that the merger will not be as equal as some might expect and will instead see one side make concessions to the other firm to help the merger work.
Honda wants to take the lead
Honda wants to take a firm lead in the merger and is asking Nissan to make hard decisions to help complete it.
According to the report from Japanese publications Kyodo News and NHK Honda is looking to take a lead role in the merger which is not a surprise since Honda is the stronger of the two companies in the tie-up and would in theory have more leverage than Nissan when it comes to ironing out the structure of the merger. This might include buying a large amount of Nissan shares to have a massive amount of control over the company. It’s no secret Honda doesn’t want Renault anywhere near the completed merger and that it wants to have control over what results from the newly combined company. This concern has reportedly come in the form of Honda demanding Nissan to buy out Renault’s shares which might not be as easy as it looks especially if the French automaker chooses to put up a fight.
This might not please Nissan executives within the company who envisioned an equal amount of control but with Nissan struggling to survive and dealing with multiple problems including falling sales and a bloated new vehicle inventory, Nissan’s ability to play hardball with Honda and its demands is limited and the leverage that they would have is minimal at best. This fresh round of news also confirms prior reports that Honda was looking to be the lead player and not the other way around.
More Honda Nissan Merger Stories
- Honda to Take Lead in Planned Merger with Nissan
- Honda Wants Nissan To Buyout Renault’s Shares As Merger Faces Its First Hurdle
- Mitsubishi Considers Exit From Nissan As Merger Talks Continue
Nissan’s independent streak may be hard to shake
Honda’s tactics might create resistance within Nissan which has been known for having an independent streak.
As for Nissan, these demands run afoul of its long-running independent streak. Even in its current partnership with Renault, the company resisted efforts to bring it closer to Renault. After former CEO and current international fugitive Carlos Ghosn left the company, Nissan began to distance itself from Renault and to reduce the French automaker’s influence in its affairs. That included getting Renault to not only waive some of its voting power but to also put the large majority of its shares in a trust.
These latest challenges with the merger also provide some form of explanation for the two companies delaying merger-related updates which was supposed to take place at the end of January. As the merger talks continue to take place, the terms of the merger are also being ironed out and it will be interesting to see what the new entity will look like especially if the two companies choose to release any further updates about the situation.
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