Did you really think the proposed merger between Honda and Nissan was going to move ahead smoothly and without drama? Non!
According to a report from Bloomberg, suits at Honda have asked Nissan if it wouldn’t mind washing itself of any relationship with Renault prior to shacking up. At present, the French automaker holds a 35.7 percent stake in Nissan which could be worth over half a trillion yen. That susses out to roughly $3.6 billion American dollars. It is suggested the chances of Nissan having that type of money lying around, given the alleged state of the place, is pretty low though Bloomberg reports Nissan’s cash and cash equivalents were approximately 1.5 trillion yen though the end of last year.
Speculated reasoning for Honda wishing its new dance partner not be tied to another manufacturer is split. One group says Honda is anxious that someone else could come in and snap up Renault’s 35.7 percent share in Nissan, a situation which would introduce an unwanted third party to the table amid merging the two brands. Imagine if someone like Elon Musk did so; heads would explode at Honda.
Even given the trillion-plus yen that is said to be on hand at Nissan, the brand is struggling. It was only a couple of months ago that news surfaced about a desire to dismiss nearly 10,000 workers along with slashing 20 percent of manufacturing capacity. Operating income is down and revenue outlooks are low. Like other legacy international automakers, Nissan is struggling in the world’s biggest car market – which is to say, China. In fact, it recently pared forecasts for each of its major markets including North America.
Nissan and Renault have been seeing each other off-and-on since the turn of the millennium, with Mitsubishi entering the picture as a third wheel in 2016. Further complicating the Honda-Nissan merger, by the way, is the oft-overlooked fact that both companies have separate agreements with a brand called Dongfeng in China, creating more threads to untangle if a Honda/Nissan merger were to happen. Nothing’s ever simple, is it?
[Image: Honda]
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