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Honda is ready to resume the takeover talks in order to create the fourth largest car producer in the world when Nissan’s managing director Makoto Uchida withdraws, according to knowledge of the considerations.
The 58-year-old was one of the strongest supporters in Nissan for a contract with Honda. The relationships between Uchida and his counterpart Toshihiro Mibe deteriorated when Honda was frustrated about the speed of the restructuring of Nissan and the depth of his financial problems.
The merger talks collapsed after Honda had called for Nissan to become a full subsidiary instead of establishing a holding company, whereby the two companies are “equivalent”. Honda would be ready to revive negotiations under a new boss who, according to a person, can better manage the internal opposition.
Uchida has hinted at his wish to stay until 2026, but it looks like the pressure to deploy from board members and partner Renault in the next few months after having botched negotiations for a megade of USD 58 billion. Nissan’s Board of Directors also started informal discussions about the time of his exit, said a person familiar with these conversations.
Honda is still attracted to smaller competing Mitsubishi engines for its plug-in hybrid technology and strong footprint in Southeast Asia.
“I regret that it ended in this way,” Miben told reporters when the merger talks collapsed. According to people who are familiar with Mibe’s thinking, it is a destination for a new offer that Uchida will resign.
“If discussions about business integrations occur again, we will not completely rule out the possibility of resuming the discussions,” said Honda.
The abrupt collapse of the Honda deal has left Nissan, who struggles with composite sales and threatening debt repayments and is an alternative partner to ensure his survival.
Foxconn has been circulating for months and confirms his interest in receiving Nissan shares as a means of securing contracts for the production of electric cars last week. Jun Seki, a former colleague who previously competed against Uchida to become Nissan’s Chief Executive, is now Chief Strategy Officer for the EV Division of Foxconn and led the overture to Renault to buy his Nissan shares.
But when Nissan becomes more and more susceptible and the Japanese establishment tries to ward off Foxconn, which is considered too close to China, more radical suggestions will also float.
Global private -equity groups -including KKR, to which Marelli, an important supplier of Nissan -and US technology companies, were considered, according to three people with knowledge of the discussions to invest in the company.
Some advisors tried to put together consortia to share the costs and the risks that were included with the purchase of a company that needed a deep restructuring was included. A proposal examines the inclusion of US car manufacturers who want to secure more domestic factories for navigation by President Donald Trump’s tariff regime.
“Every buyer can have two approaches: they get on or wait until they get into trouble and the price tag falls. Potential buyers do not have to hurry into the purchase of the company. Nissan is in a hurry, ”said Macquarie analyst James Hong.
Nissan’s partner Renault is also considering his options because it reactivates talks with Foxconn, who turned to the group at the end of last year to buy some of his shares in Nissan.
The French automobile manufacturer is committed to his alliance with Nissan, but wants to sell a large part of the 36 percent that she still has in the Japanese group. Renault refused to comment.
Nissan sees itself exposed to an impending cash flow crunch if sales continue to drop. The company has 1.2 TN (USD 6.6 billion) net money, burned in the first nine months of the financial year, 506 billion yen.
Insiders say that Nissan must ensure that it has sufficient cash buffer not only to finance restructuring costs, but also to avoid a “vicious circle” from interest rates for its loans, which increase due to a potential credit press. His bonds are evaluated by Junk status by S&P and adhered to the status of the investment classes by other rating agencies.
The Mibuho Financial Group, the main bank of Nissan and one of the most important actors who were pushing for a merger with Honda, tries to find paths to give the group liquidity.
Motoo Nagai, a former Mizuho manager, and Yasushi Kimura, the CEO, were the only members who had expressed support for Hondas Subsidiary.
The bank is now exploring financing solutions in which private equity groups are involved, according to the people familiar with the matter. Mibuho rejected a statement.
Uchida said on Thursday that he wanted to step aside as soon as Nissan was back on the recovery path, but would go earlier if he were asked.
“My responsibility is really important. . (but) is irresponsible without improvement, ”he said. “It is not my intention to capture this position.”
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