HomeBusinessHonda is exploring Nissan Rescue with Foxconn, also on the hunt for...

Honda is exploring Nissan Rescue with Foxconn, also on the hunt for deployment

(Bloomberg) — Honda Motor Co. is in talks to acquire Nissan Motor Co. to help by potentially forming the world’s third-largest automaker to better address the escalating challenges facing the global auto industry.

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The two Japanese manufacturers are engaged in merger talks that appear to have accelerated after Hon Hai Precision Industry Co., the Taiwan-based maker of iPhones known as Foxconn, approached Nissan about acquiring a stake in the company, a person familiar with the matter said with the case. . Foxconn has invested heavily in factories to build electric vehicles.

Nissan shares – which had lost two-thirds of their value since the arrest of former Chairman Carlos Ghosn in late 2018 – rose a record 24% in Tokyo trading on Wednesday. Honda’s stock fell 3% to its lowest closing price in more than a year.

Nissan’s years of simmering troubles came to a head in early November, when the company cut profit forecasts and said it would have to cut 9,000 jobs worldwide. The automaker also announced a 20% cut in global production as consumers turn their backs on lackluster offerings and let the models gather dust at dealerships.

Since then, several entities have joined Nissan, including several activist investors who have built positions in the stock. Honda’s market value is more than four times that of Nissan, despite the former making only marginally more cars. This indicates that Honda would have the upper hand in talks about a possible deal that the company describes as a merger.

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Renault SA will also necessarily have a say in any deal as it owns 36% of Nissan – a remnant of a long-standing alliance between French carmaker Nissan and Mitsubishi Motors Corp. Renault is open to a possible merger of Nissan with Honda as the talks could shield Renault from the crisis plaguing its partner, according to people familiar with the situation.

It is unclear whether Nissan is also in talks with Foxconn or has already rejected its overtures.

A Nissan spokesperson declined to comment. A Foxconn representative was not immediately available for comment. Honda Executive Vice President Shinji Aoyama said the automaker is considering several options, which could also include a capital tie or the creation of a holding company under which the combined companies would operate.

A Honda-Nissan deal could be expanded to include Mitsubishi Motors, which already has capital ties with Nissan, a person familiar with the talks said.

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