Nissan shares tumble by most since August amid Honda deal worries
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After soaring on news of potential merger, fall reflects concerns about expected terms of deal, say analysts. Shares in the Japanese carmaker Nissan have tumbled in their biggest fall since August’s stock market sell-off, as investors turned their attention to the company’s planned tie-up with domestic rivals Honda and Mitsubishi.
Nissan’s shares fell by as much as 15% on Friday, before regaining some losses to close down 7.8%, in a sign of investor volatility. The fall came less than two weeks after its shares soared by 20% on 17 December, after the first reports that Nissan was to begin talks on a potential merger with Honda.
Nissan, Honda and Mitsubishi are considering joining forces to better contend with falling sales and competition from Chinese brands. Nissan and Honda have confirmed they have agreed to “start consideration towards a business integration through the establishment of a joint holding company”, and that Mitsubishi would also decide on joining by the end of January.
A merger between Nissan and Honda would combine Japan’s second- and third-largest carmakers, and add the smaller Mitsubishi, creating the world’s third-largest carmaker in terms of annual sales, behind Japanese rival Toyota and Germany’s Volkswagen.
Toyota is considered more resilient than its domestic competitors because of its early adoption of hybrid vehicles, while the likes of Nissan and Honda have struggled to find the money to invest in switching away from fossil-fuel models towards cleaner electric vehicles.
