Nikkei reported on Thursday that Taiwan’s Hon Hai Precision Industry’s plans to acquire Nissan Motor are again in the spotlight.
With Nissan solidifying its decision to terminate the Memorandum of Understanding (MOU) for management integration with Honda, two obstacles that had previously limited Hon Hai’s movement are expected to be removed.
According to Nikkei, Hon Hai is still interested in acquiring Nissan to expand its electric vehicle (EV) business.
A source stated, “As we enter the era of Software-Defined Vehicles (SDVs), collaboration with Hon Hai, which boasts cutting-edge semiconductor procurement capabilities, could benefit Nissan as well.”
Hon Hai’s efforts have been quietly progressing since last year.
Taiwan’s Central News Agency reported in mid-December 2024 that Hon Hai was in discussions with Nissan’s major shareholder, France’s Renault, to acquire Nissan shares. Hon Hai’s EV business Chief Strategy Officer, Jun Seki, visited France.
However, Hon Hai’s acquisition attempt was halted due to two main constraints.
One was the “exclusive negotiation clause” in the Honda-Nissan MOU, and the other was the Hon Hai management’s desire to avoid friction with Japanese stakeholders.
Now that the Honda-Nissan integration talks have stalled and the MOU has been terminated, the exclusive negotiation clause is expected to be lifted, making it easier for Hon Hai to proceed with the acquisition.
However, there are still obstacles in the acquisition process. Nissan is subject to prior review for foreign investment under Japan’s Foreign Exchange Law, and there’s still strong opposition within the Japanese government to an acquisition by Hon Hai.
Hon Hai’s interest in acquiring Nissan is believed to stem from delays in its EV business growth.
Despite announcing its entry into the EV market in 2019, Hon Hai has not yet established itself in the global market after six years. The company’s goal of achieving a 5% EV production market share by 2025 also seems challenging.
Acquiring Nissan could offer Hon Hai a unique opportunity to secure factories, distribution channels, and technology in one go.
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