According to Bloomberg, on January 16, Japanese automaker Honda asked Nissan whether it could buy back the shares in Nissan held by French automaker Renault. Currently, Honda and Nissan are preparing for a merger to expand their scale in the increasingly competitive automotive market.
Data collected by Bloomberg shows that Renault holds 35.7% of Nissan's shares, valued at approximately 557 billion yen (about 3.6 billion USD).
Kyodo News cited sources saying that Honda is concerned that during merger talks with Nissan, Renault's shares in Nissan could be acquired by a third party.
In response to the report, representatives from Honda and Nissan declined to comment. The alliance between Nissan and Renault dates back to 1999, with Mitsubishi Motors joining the alliance in 2016.
In December 2024, Honda and Nissan began merger talks, which would effectively split the Japanese automobile market in two. The global automotive industry is trending towards further consolidation to compete with electric vehicle manufacturers like Tesla from the United States and BYD from China.
Before Honda and Nissan announced their merger talks, rumors had circulated that Foxconn was interested in partially or fully acquiring Nissan to leverage its manufacturing capabilities and drive Foxconn's push into the electric vehicle sector. Sources revealed that it was partly due to Foxconn's plans that Honda and Nissan accelerated their merger discussions.
Honda and Nissan have stated that they plan to announce the deal framework by the end of January 2025, and aim to establish an independent holding company by August 2026, with plans to list it on the Tokyo Stock Exchange.
However, it is unclear whether Nissan has enough funds to repurchase Renault's shares in the company. As of December 31, 2024, Nissan's market value had fallen to approximately 1.56 trillion yen, with cash and cash equivalents around 1.52 trillion yen.
Nissan is also facing financial difficulties, which is one of the main reasons for its merger with Honda. In November 2024, Nissan announced plans to cut 9,000 jobs globally and reduce production capacity by 20%. For the first half of the 2024 fiscal year (April to September), Nissan's operating profit plunged by 90.2% year-on-year to 32.9 billion yen, while net profit dropped by 93.5% to 19.2 billion yen.
Currently, Nissan expects its operating profit for the 2024 fiscal year (April 2024 to March 2025) to fall to 150 billion yen, a 70% decrease from previous projections. The company also lowered its revenue forecast by more than 9%, meaning it now expects almost no growth in revenue year-on-year for the 2024 fiscal year.
