Photo/Illutration Nissan Motor Co. and Honda Motor Co. (Asahi Shimbun file photos)

Honda Motor Co. and Nissan Motor Co. on Feb. 13 officially announced the end of their talks about a business integration plan.

Their respective board of directors agreed to withdraw the basic agreement they had signed for the management integration only months earlier. 

The merger, which would have created the world's top three automaker group if realized, broke down a month and a half after talks began in December.

In a prepared statement, the two companies cited the need for quick and efficient decision-making and efficient management in the competitive automotive industry.

"To prioritize speed of decision-making and execution of management measures in an increasingly volatile market environment heading into the era of electrification, it would be most appropriate to cease discussions and terminate” the agreement signed Dec. 23, it said.

Nissan President Makoto Uchida said at a news conference that the purpose of the merger was to “join forces to create a stronger corporate entity that would be able to compete globally.”

But he said ultimately he could not accept the proposal from Honda for Nissan to become a wholly owned subsidiary of Honda.

If Nissan were to become a wholly owned subsidiary of Honda, “we could not be certain to what extent Nissan would be able to protect its position and maximize its potential.”

Therefore, “We could not accept the proposal,” Uchida said.

At a separate news conference, Honda President Toshihiro Mibe agreed with Uchida's sentiments.

“(Honda) proposed integration through a shared exchange (to make Nissan a subsidiary), but we could not agree on a framework,” he said. 

Mibe said he thought that “a one-governance system (with a single management body) is necessary to make decisions more quickly when times get tough.”

He also stated, “(Honda) did not consider a hostile takeover bid and never will.”

There have been reports suggesting that Nissan’s restructuring plans had been delayed and that the two companies had been at odds over that as well as over the integration ratio.

But Mibe denied the reports, saying, “It is not true.”

The Honda president said the two companies will continue to cooperate in the area of technology.

“While this will not amount to a business integration, it will provide a certain degree of economies of scale,” Mibe said.

Uchida said regarding the technological alliance with Honda, “We will continue to focus on creating new value and efficient synergies.”

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