Honda is poised to reinitiate discussions regarding a potential acquisition of Nissan, following the recent uncertainty surrounding their proposed merger, which faltered just weeks after negotiations commenced. Notably, Honda has indicated its willingness to resume these discussions, contingent upon the resignation of Nissan CEO Makoto Uchida.

Last week, the merger talks between Honda, Japan's second-largest automaker, and Nissan, the third-largest, collapsed, thwarting plans to establish a car manufacturer valued at over $60 billion. The two companies failed to reach an agreement on key terms, leading Honda to withdraw from the negotiations. This development has further complicated Nissan's situation and underscored the challenges faced by traditional automakers in light of competition from their Chinese counterparts, who are significantly impacting the global automotive landscape.

According to a report from the Financial Times, Honda has reversed its previous position but has attached a condition to its renewed interest. The report suggests that Honda is open to resuming talks with a new leadership at Nissan, which could better navigate internal dissent. Interestingly, Uchida had previously been a strong proponent of the merger with Honda. However, tensions have escalated between him and Honda CEO Toshihiro Mibe, particularly as Mibe has expressed concerns regarding the pace of Nissan's restructuring and its financial difficulties.

The Financial Times report also noted that Uchida had planned to remain in his position until 2026 but is now under pressure from board members and Nissan's alliance partner Renault to resign in the near future, following his handling of negotiations for a $58 billion megadeal. Additionally, Nissan's board of directors has reportedly begun informal discussions about the timing of Uchida's potential exit.

Honda-Nissan merger: What was the dealbreaker?

The negotiations regarding a potential merger between Honda and Nissan collapsed earlier this month when Honda insisted that Nissan should become a wholly owned subsidiary rather than forming a new holding company that would allow both automakers to operate on an equal basis. This demand marked a significant shift from the original intentions disclosed on December 23, which aimed to create a joint holding company, and it faced considerable resistance from within Nissan. 

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