There will be no Japanese motor supergiant. The boards of directors of the vehicle manufacturers Nissan Motor and Honda Motor decided on Thursday to abandon the negotiations aimed at merging both companies, as reported by Efe.
Honda's CEO, Toshihiro Mibe, attributed the failure of the negotiations to the differences between both companies regarding the creation of a "unified governance system" and an exchange of shares.
Mibe appeared before the media on Thursday to explain the failed merger project with Nissan, after both companies' boards of directors decided to abandon the memorandum of understanding (MOU) signed last December to negotiate the creation of a joint venture.
The executive regretted that both companies were unable to progress in negotiations that, if successful, "would have had enormous benefits" for Honda and Nissan and would have resulted in the world's third-largest automaker by sales volume. "But this integration required quick, decisive, and painful decision-making," Mibe said in his virtual appearance.
Honda was also "concerned" about the management issues that could arise from having representatives from both companies on the board of the hypothetical joint venture, where Honda Motor executives would have the majority, according to Mibe.
Therefore, the second-largest Japanese automaker proposed as an alternative to carry out a share exchange between the two companies and "unify" the governance structure.
"This would allow for the rapid creation of a system under a single governance, something we consider a top priority in the current business environment," Mibe stated, also acknowledging that this measure "was a very tough decision for Nissan." "Quick decision-making under unified leadership was the best way to achieve success," emphasized Honda's top executive.
Whether in the case of creating a joint venture or agreeing on a share exchange, Honda and Nissan would have maintained their own brands and operated as independent companies, he assured.
Mibe, however, wanted to refute the "speculations" published by local media, which suggested that Honda had proposed to buy all of Nissan's shares to turn it into its subsidiary, something that was categorically rejected by the latter. "Neither party presented anything specific regarding the share exchange," stated the executive.
Mibe also denied that Honda had pressured Nissan to accelerate the restructuring plan that the Yokohama-based company is undergoing to overcome its economic difficulties, which includes a 20% reduction in its global production and a cut of 9,000 jobs.