Japanese car company Nissan is canceling the merger talks with its competitor Honda. Under this, more than $ 60 billion agreement is being canceled. On Wednesday, a source gave this information. Had this agreement been successful, the new company would have become the third largest vehicle manufacturer in the world. This is also raising the question that how the company will bring a big change in its situation alone.
Two people aware of the case said that due to increasing differences between the two Japanese vehicle manufacturers, the path of talks became unclear.
Nissan’s stock fell more than 4 per cent on the Tokyo Stock Exchange. After the report of Nikkei Business Daily that the Nissan is withdrawn from the deal, the stock broke. The exchange then temporarily stopped the shares trading. Honda’s shares continued trading and the day -to -day rose with a gain of over 8 percent, indicating relief for investors. After Toyota, Japan’s second largest car manufacturer Honda and the third largest Nissan said in December that they are talking towards making the world’s third veteran vehicle manufacturer in terms of sales. The industry is facing major threats from China’s BYD and other electric vehicle companies.
Reuters had earlier reported that Nissan could cancel the dialogue after Honda indicates that a subsidiary is made. A source said that Nissan objected to this as it was originally different from the plan prepared as a merger of equality.
Another source said that the Honda’s market value is five times the same against Nissan with 7.92 lakh crore yen and was worried about the progress of its small competitors about the rejuvenation scheme.
The agreement was being negotiated at a time when the imposition of a possible tariff by US President Donald Trump could be a problem. Analysts say Tariff against Mexico would be more challenging for Nissan than Honda or Toyota.