The proposed merger between Nissan and Honda may now be called off, according to a report from Reuters.
According to multiple sources, growing differences between the two automakers have proven to be an issue. Though Nissan was under the impression they would be merging as equals, Honda had proposed taking Nissan in as a subsidiary.
“The news saying that Nissan did not want to be a Honda subsidiary appears to highlight that control was a contentious issue,” said Christopher Richter, Japanese automotive analyst at brokerage CLSA. “Without being able to have control, Honda appears to be walking away.”
Another source added that Honda was also growing concerned about Nissan’s progress in its turnaround plans. The two automakers had planned to finalize the merger’s direction by January before extending the deadline to mid-February.
"Investors may get concerned about Nissan's future (and) turnaround," said Morningstar analyst Vincent Sun. “Nissan also has a larger risk exposure to U.S.-Mexico tariffs than Honda and Toyota.”
