At the beginning of this month, negotiations on the merger of the Japanese companies Honda and Nissan definitely failed.
The reason, according to Japanese media, is that Honda, instead of joining forces on an equal basis, wanted to absorb the struggling Nissan, reports Capital.ba.
The second and third largest car manufacturers and sellers in Japan began merger negotiations at the end of December last year, which was supposed to lead to the creation of a holding company that would rank third in the world in terms of the number of vehicles produced, behind the Toyota and Volkswagen groups.
However, those talks went astray in January when it became clear that Honda, which is in a much better financial situation, was not satisfied with the pace of restructuring at Nissan.
The latter suffered a total loss of around 1,5 billion US dollars last year, and announced a plan to lay off nine thousand of its approximately 130 thousand workers to reduce losses, but the implementation of that plan has been slow.
News also leaked to the public that Honda has no intention of establishing the new company on an equal footing, but rather, in line with its better market position and, especially, greater financial power, to reserve for itself the role of majority owner and leader.
It is now clear, however, that Honda not only demanded that Nissan carry out the rationalization it had planned more quickly, but also that it drastically reduce production and the number of workers - a request was submitted to Nissan management to lay off as many as 40 thousand employees.
Anything less, Honda believed, would hinder the creation of true synergy after the merger and threaten the value of Honda's own shares.
Honda executives, Japanese media report, have outlined a vision in which the name of the new joint venture would not mention Nissan at all. That is, the new company, rather than a joint venture, would be a structure in which Honda would "swallow" Nissan and make it one of its subsidiaries.
This is clearly the complete opposite of what Nissan had in mind when it entered into negotiations, as can be seen from the statement of its president, Makoto Uchida, who said at a joint press conference on December 23 that there would be no superiors and subordinates when the two companies merged.
He announced earlier this month, after negotiations broke down, that his company would turn to looking for other possible partners.
The vulnerable Nissan is now once again exposed to the threat of a hostile takeover, which, according to media reports in East Asia, is being planned by the super-rich Taiwanese corporation Foxconn, a manufacturer of smartphones and other electronics that wants to get involved in the automotive industry in a big way, through the purchase of Nissan.
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