Japanese automakers Honda (HMC) and Nissan (NSANY) have ended merger negotiations that would have created the world’s third-largest vehicle manufacturer.
The merger deal, which investment bankers speculated would have been worth $60 billion U.S. or more, was aimed at helping the two automotive companies achieve economies of scale.
However, Honda and Nissan said they were not able to come to agreement on how to structure the combination.
Proposals that were reportedly considered included one where Honda would serve as the parent company and Nissan as a subsidiary through a share exchange.
In the end, agreement couldn’t be reached. However, the two companies said they will “collaborate within the framework of a strategic partnership” moving forward.
Both Honda and Nissan said they remain focused on developing both electric vehicles and intelligent vehicles.
Some media reports state that the merger talks fell apart due to Nissan’s refusal to close some of its automotive factories. Honda was also reportedly pushing for deep staff cuts at Nissan.
The merger talks were announced last December, with Honda and Nissan saying they aimed to create the world’s third-largest automaker by vehicle sales.
The merger announcement came a month after Nissan posted poor financial results and said that it would cut 9,000 jobs and reduce its global production capacity by a fifth.
Honda’s stock is up 1% on news that the merger talks have ended. Over the last 12 months, the company’s share price has declined 19% to trade at $27.58 U.S. per share.
Nissan’s shares, which trade on the over-the-counter market, are up slightly on news the merger has ended. Its stock has declined 27% in the last year to trade at $5.39 U.S. per share.
