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[News] Honda-Nissan Merger Talks Reportedly Spurred by Concerns over Foxconn’s Potential Acquisition
Japanese automobile giants Honda and Nissan are reportedly undergoing merger talks amid rising competition in the Chinese market. However, a Nikkei report reveals that the move may also be prompted by a potential acquisition by Taiwan’s Foxconn, a situation which both companies would rather avoid.
According to Nikkei, Foxconn, known as Apple’s biggest iPhone supplier, entered the electric vehicle market in 2019. Notably, the company has been quietly pursuing a stake in Nissan for several months, as per sources cited by Nikkei.
It is worth noting that Jun Seki, Foxconn’s EV chief strategy officer, was a former Nissan executive, the report adds. With a goal of capturing 40% of the global EV market, Seki has now focused on his former employer, Nikkei indicates.
Foxconn Ambitious in the EV Sector, with Prototypes Released
Foxconn has indeed shown its ambition in the EV sector, as in mid-September, with its subsidiary Sharp, the company unveiled an innovative EV prototype, the LDK+, according to Sharp’s press release.
In October, Foxconn announced two, new reference electric vehicles, extending its automotive range with the MODEL D, a lifestyle multipurpose utility vehicle, and the MODEL U, a midi-sized electric bus, as per its press release.
Honda: Nissan’s Possible White Knight?
An investment in Nissan, the pioneer of mass-produced EVs with its 2010 Leaf model, would give Foxconn access to EV expertise and global sales networks, the Nikkei report suggests.
To achieve the goal, Foxconn is reportedly eyeing Nissan shares held by trust banks on behalf of Renault. According to Nikkei, by September, trust banks held 22.8% of Nissan shares.
As per Nikkei, upon learning of Foxconn’s interest, Nissan discreetly initiated talks to safeguard its position. Honda, which partnered with Nissan in August, was also said to be alarmed by Foxconn’s actions. Nikkei suggests that in the event of a takeover attempt, Honda might have stepped in as Nissan’s white knight.
Sources cited by Nikkei indicated that Honda and Nissan are seeking to operate under a single holding company and are expected to sign a memorandum of understanding (MOU) for this new entity soon, as the two parties are also reportedly considering including Mitsubishi Motors in the new alliance.
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(Photo credit: Foxconn)
