Japanese Auto -giants of Honda and Nissan stopped negotiations on a possible merger that could create the third largest car company in the world in terms of sales. This decision was made after careful discussions that lasted for some time, CNBC reports.
The official rejection of the merger has been the result of a number of complex issues that failed. In particular, options were discussed that included the opportunity for Honda to change the structure of the transaction and make Nissan their subsidiary through shares exchange. However, negotiations have not received support because of a few key factors:
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Nissan Protests: The Auto Giant protested on Honda plans to reduce production and release staff, which was part of the terms of the agreement.
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Nissan Independence: Nissan did not want to lose its independence and become a subsidiary of Honda.
Despite the completion, both companies have confirmed that they would continue to cooperate in the field of intellectual technologies and electrification of cars. This retains the potential for working together in other important areas without the need to combine.
Against the background of the news on the termination of negotiations, Honda shares increased by 2.14%, while Nissan's shares lost 0.34%.
In addition, Honda presented financial results in the third quarter showing the following data:
- Revenue : 5.53 trillion ($ 36.4 billion), an increase of 1.4% compared to the previous year.
- Operational profit : 397.8 billion yn (+4.6%).
