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Honda is willing to take over the buyouts to create the fourth largest car producer in the world if the CEO of Nissan, Makoto Uchida, fell back, according to people knowing the deliberations.
The 58 -year -old man had been one of Nissan’s greatest defenders for an agreement with Honda. However, the relations between Uchida and its counterpart Toshihiro Mibe have deteriorated while Honda has become frustrated by the speed of Nissan’s restructuring and the depth of its financial problems.
The merger talks broke down after Honda demanded that Nissan become a fully owned subsidiary instead of establishing a portfolio company, the two companies on a “equal foot”. Honda would be ready to relaunch negotiations under a new boss who can better manage the internal opposition, according to a person.
Uchida indicated her desire to stay until 2026, but faces pressures to leave members of the board of directors in the coming months and his partner Renault after having botched negotiations for a megadéal of $ 58 billion . The Nissan board of directors had also started informal discussions at the time of its release, said a person familiar with these talks.
Honda remains attracted by Nissan’s capital links with small Mitsubishi rival engines for its rechargeable hybrid technology and its strong Southeast Asia imprint.
“I regret that it ended this way,” Mibe told journalists when the merger talks broke out. However, according to people familiar with Mibe’s thought, a stipulation for a renewed offer is that Uchida moves.
“If discussions on trade integrations arise again, we will not completely excite the possibility of resuming discussions,” said Honda.
The brutal collapse of the Honda agreement left Nissan, which fights with sales and reimbursements of imminent debts, rushing to find another partner to guarantee its survival.
Foxconn has been running for months, confirming last week his interest in acquiring Nissan actions as a means of obtaining contracts to make electric cars. Jun Seki, a former colleague who previously ran against Uchida to become Managing Director of Nissan, is now Director of the Foxconn EV Division Strategy, and has led the opening of Renault, to buy his Nissan shares.
However, as Nissan is becoming more and more vulnerable and the Japanese establishment seeks to distance Foxconn, which is considered too close to China, more radical proposals are also being launched.
World investment capital groups – including KKR, which owns Marelli, a Cell Nissan supplier – and American technological companies were invited to consider investing in the company, according to three people knowing the discussions.
Some advisers were trying to create consortia to share the costs and risks linked to the purchase of a company that needed deep restructuring, added people. A proposal examines the involvement of American car manufacturers, who wish to obtain more national factories to navigate the price scheme for President Donald Trump.
“Any buyer can have two approaches: you enter right away or wait until you get into trouble and the price drops. Potential buyers do not need to rush into the purchase of the company. Nissan is the one in a hurry, “said Macquarie analyst James Hong.
Nissan’s partner, Renault, also plans its options while reactivating the talks with Foxconn, who approached the group at the end of last year of the purchase of some of its actions in Nissan.
The French car manufacturer is attached to its alliance with Nissan but wants to sell a large part of the 36% it still has in the Japanese group at a higher price. Renault refused to comment.
Nissan faces a tightening of imminent cash flows if sales continue to drop. The company has 1.2 TN ¥ (6.6 billion dollars) of net cash but burned 506 billion y billions in the first nine months of the financial year.
The initiates say that Nissan must ensure that he has a sufficient cash stamp, not only to finance the costs of restructuring, but also to avoid a “vicious circle” of interest rates on the increase in its loans due to a retro-efficient of credit. Its obligations are classified by S&P and cling to the investment note status of other rating agencies.
The Mizuho financial group, the main bank of Nissan and one of the key players who put pressure for a merger with Honda, is to try to find ways to inject cash into the group.
Moto Nagai, former executive of Mizuho, and Yasushi Kimura, chairman of the board of directors, were the only members to have expressed their support for the Honda subsidiary.
The bank now explores financing solutions that involve investment capital groups, according to people familiar with the problem. Mizuho refused to comment.
Uchida said Thursday that he wanted to withdraw once Nissan was back on the path of recovery, but would go earlier if asked.
“My responsibility is really important. . .[but] Resignation without any improvement is irresponsible, “he said. “It is not my intention to hang on to this position.”
