Nissan Motor looks for new partners as Honda merger talks set to collapse: Report 

Nissan Motor is looking for a new partner as it looks to end merger talks with Honda Motor Co., sources in the know told Bloomberg. The Japan-based carmaker is scouting for a US partner ideally from tech sector, the sources told Bloomberg on condition of anonymity.

North America is Nissan's most important market and a larger rift towards automation and electrification has led carmakers to look for alliances with other industries. 

Nissan shares were up 8.7% in afternoon trade on Thursday.  A Nissan representative refrained from offering comments, noting that any contours of the transaction would be announced as planned in mid-February. 

The auto firms confirmed yesterday that they were still analysing various alternatives, among which was the viability of ending merger talks. Honda had mooted the idea of acquiring Nissan and making it a subsidiary. This was met with severe opposition within Nissan, one of the people noted, adding that the amount of investment was also a sore point. 

Honda had also made restructuring of Nissan's operations a requirement for seeing any transaction through, Bloomberg noted. Yet, apart from curtailing jobs and output, Nissan's plans at the moment do not entail plant closures, the newswire noted. 

Ending discussions with Honda, which were exclusive, would let either side walk away from the deal without having to pay a hefty cancellation fee of ¥100 billion ($657 million), according to their Memorandum of Understanding on Dec. 23. 

Nissan’s board is pushing Chief Executive Officer Makoto Uchida and other executives to work on a more detailed restructuring plan parallelly to any talks with any potential new partner, the people said. The goal is to come up with a deeper revamp in time for Feb. 13, when it is scheduled to report quarterly results. That’s also when the board will meet to formalise its decision, one person said.

Nissan has not been able to regain its footing since the arrest of its earlier Chairman Carlos Ghosn, on charges of underreporting and compensation. This has left the firm with an excess of production capacity and an out of date production capacity. 

Hon Hai Precision Industry Co., the maker of iPhones known as Foxconn that is trying to establish a foothold in outsourced manufacturing of electric vehicles, put its interest in pursuing Nissan on hold last year when it became clear that the Japanese automaker was in negotiations for a potential combination with Honda. But the electronics contract manufacturer didn’t give up completely, preferring to see if the two would make legitimate progress toward a deal before deciding on its next move.

Hon Hai Precision Industry Co., which is looking to make a mark in the outsourced manufacturing of EVs, had put its plans of talking to Nissan on the backburner, when talks of Nissan and Honda surfaced. The iPhone maker better known as Foxconn did not completely give up, waiting to see how it would pan out, before making its next move, Bloomberg reported.