(Bloomberg) — Honda Motor Co. threatened its strategic software partnership with Nissan Motor Co. if it wanted to join forces with Hon Hai Precision Industry Co., Nikkei said.
Most read from Bloomberg
If the approach of Hon Hai, the iPhone maker known as Foxconn, turned hostile after a rejection, Honda also offered to protect Nissan as a white knight investor, the report said.
Official talks, including around a possible merger, between the two Japanese companies could start as early as December 23, Nikkei reported. The negotiations offer the potential to create the world’s third-largest automaker, better positioning it against market leader Toyota Motor Corp. and others in a tumultuous global marketplace.
Shares of Honda fell more than 2% in early trading on Thursday, while Nissan rose 1% after a record 24% rise on Wednesday.
Honda is considering several options, according to Executive Vice President Shinji Aoyama, including a merger, a capital seizure and even the creation of a holding company. The alliance would also include Mitsubishi Motors Corp. which Nissan already has a strategic partnership with.
Representatives for Honda and Nissan did not immediately respond to requests for comment on the start date of the talks.
Honda and Nissan’s move to strengthen ties comes after Foxconn approached Nissan about acquiring a stake in the company, Bloomberg reported Wednesday.
A merger of the Japanese car brands would create a bulwark against the Toyota Group at home and allow Honda and Nissan to pool their resources to compete with Tesla Inc. in global markets. and Chinese automakers such as BYD Co.
“It is only natural that consolidation of major automakers will become more common as the industry undergoes a shift toward advanced technology vehicles,” Subaru Corp. said. CEO Atsushi Osaki during a group interview in Tokyo on Wednesday. “We must come together to tackle challenges that are too difficult to overcome alone.”
Renault SA is now open to the idea of a merger between Honda and Nissan, according to people familiar with the situation. With a 36% stake, Renault remains Nissan’s largest shareholder and its approval will be key to any deal.
–With help from Tsuyoshi Inajima.
Most read from Bloomberg Businessweek
©2024 BloombergLP
