Honda’s Nissan takeover collapses as Apple iPhone maker Foxxconn set to charge into EV market
One of the biggest company mergers in automotive history is on the rocks after months of negotiations between Honda and Nissan appear to have fallen over leaving the latter vulnerable to a takeover none of them wanted.
As reports filtered through that negotiations between the two giant Japanese carmakers had stalled and the merger is set to be abandoned, shares in both Honda and Nissan have risen while boards for the two companies consider their positions.
Shares of Nissan rose as much as 7.4 per cent, while Honda climbed as high as 4.2 per cent.
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By continuing you agree to our Terms and Privacy Policy.Nissan’s value has fallen to near bankruptcy levels in the last 12 months with 90 per cent of the companies value being wiped off its share price, leaving it as a sitting duck for takeover.
Taiwanese smartphone company, Foxxconn, is in the hunt to buy the ailing car manufacturer as Honda and Nissan quarrel about the takeover deal to make Nissan a subsidiary of Honda, that was announced in December.
“Nissan’s board has determined that Honda’s terms for a combination of the two automakers are unacceptable”, the Wall St Journal said.
“Nissan is now open to working with new partners, including technology companies, as it looks to navigate the technological upheaval brought by electric vehicles, software-driven cars and new, fast-moving Chinese manufacturers,” Reuters added.
Foxxconn is angling to absorb Nissan in a bid to force their way into the lucrative worldwide EV market.
The Taiwanese electronics manufacturer assembles iPhones for Apple and has a factory in Zhengzhou in China which is the world’s largest iPhone production base, producing about 80 per cent of Apple’s iPhones.
CNBC says the blockbuster merger between Honda and Nissan would have catapulted them to the world’s third-largest carmaker by sales with Nissan’s strategic partner Mitsubishi also invited to participate in the merger, a decision that Mitsubishi was reportedly slated to make in mid-February or later.
A transformation in the global auto industry, driven by the advent of electric vehicles, has been disruptive to traditional automakers.
Nissan particularly has been challenged in its largest market, the US., as well as in China and other emerging markets. The automaker’s operating profits fell by 90 per cent, and net income declined by 94 per cent in the first half of fiscal year 2024, compared to the same period last year.
