Nissan Merger Talks Could Get Hostile

Foxconn, the Taiwanese electronics giant behind Apple’s iPhone, wants Nissan—the problem is, so does Honda.

Eager to expand its electric vehicle footprint, Foxconn has already approached Nissan directly about acquiring a stake in the Japanese automaker. According to reports, Nissan was lukewarm to the proposal, undeterred, Foxconn has turned to Renault, Nissan's largest shareholder, in a bid to acquire a piece.

Foxconn has been investing heavily in operations to build electric vehicles, now it just needs an electric vehicle to build.

Honda, meanwhile, has rebuked the flirtations. Claiming any alliance between Nissan and Foxconn would force it to end its strategic software partnership with Nissan. Honda has offered to step in as a “white knight” investor, potentially shielding Nissan from what could turn into a hostile takeover bid.

The Honda camp is weighing several options, including a full merger, a capital tie-up, or the formation of a holding company. The deal could also include Mitsubishi Motors, which is already rolled up with the Nissan-Renault Alliance.

Any potential deal between Honda and Nissan would likely face antitrust hurdles—if the two companies were to merge, it would create the world's third-largest automaker. It could be argued that because Nissan is on the rocks it needs a merger in order to stay competitive in the market, or that potential synergies in the EV space are crucial to staving off Chinese rivals, particularly in America.

With Renault’s pivotal role as a 36% shareholder, Honda’s warnings about Foxconn's advances, and Nissan's hemorrhaging cash problem; a deal will be made sooner rather than later. Negotiations are expected to begin as early as December 23.

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