Nissan, Honda expected to call off merger talks

Feb. 5 (UPI) -- Nissan is expected to withdraw from merger talks with Honda over the companies' failure to come to an agreement on terms.

The Asahi Shimbun, Kyodo News, and Nikkei Asia reported Nissan plans to withdraw from the memorandum that would have created the world's third-largest automaker.

Last month, the two Japanese automotive leaders announced a plan to begin merger negotiations that would have made it one of the world's leaders in the industry. Talk appeared to take a turn when Honda, the larger of the two companies pushed to have Nissan become a subsidiary of Honda.

"Honda and our company are in the stage of advancing various discussions," Nissan said in a release issued after news broke about deteriorating negotiations. "We plan to establish a direction and make an announcement around mid-February."

Honda appeared concerned that Nissan was ready to make a turnaround of its company's viability. Nissan lost 90% of its net profits last April to September. Nissan said it would cut 9,000 jobs globally and slash production by 20%.

Despite Nissan's struggles, company President Makoto Uchida said at the time of the merger announcement that he believed both companies would work side-by-side on equal footing.

"It's not about which company is dominant over the other," he said then.