Honda Stock Jumps as Merger With Nissan Reportedly Nears Collapse

KEY TAKEAWAYS

Honda Motor’s (

HMC

) U.S.-listed shares are rising about 6% in premarket trading following reports that the Japanese automaker’s
plans
to merge with ailing domestic rival Nissan are in jeopardy.

According to the

Financial Times

, which cited three people familiar with the matter, Honda unexpectedly came in with a new structure that would have made Nissan a fully owned subsidiary, a departure from the original “merger of equals” idea the two had initially planned.

A Nissan spokesperson told

Investopedia

that the

FT

article “is not based on information announced by Nissan. We aim to finalize our direction by mid-February and will announce it at that time.”

Honda could not be reached for comment Wednesday morning.

The two Japanese automakers announced plans to combine in December in a tie-up that would have created the world’s third-largest automaker, if Mitsubishi Motors is included, according to

The Wall Street Journal

. Nissan is the largest shareholder in Mitsubishi, the report said.

A deal would have
helped cut
costs and help the automaker compete globally at a time when Chinese rivals are expanding their market share for electric vehicles.

Nissan, Honda, and Mitsubishi have a
history of collaborating.
Honda and Nissan first said early last year that they would work together in parts of the EV business, and noted in August that Mitsubishi was joining the effort.

Honda shares are down almost 18% in the past year through Tuesday.

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