Nissan has decided to end merger discussions with Honda, halting plans for a $60 billion-plus deal that would have made them the world's third largest automaker by sales, according to a source familiar with the matter.  

The negotiations, which began in December, were intended to strengthen both companies against rising competition from Chinese electric vehicle manufacturers. However, disagreements over the merger structure and concerns about Nissan's ongoing restructuring efforts led to the collapse of talks, two insiders revealed.  

A major point of contention was Honda’s proposal to make Nissan a subsidiary rather than pursuing the initially agreed upon "merger of equals," a move Nissan rejected. Additionally, Honda reportedly grew increasingly skeptical of Nissan's slow turnaround efforts, which involve cutting 9,000 jobs and reducing global production capacity by 20%.  

The announcement had an immediate market impact, Nissan's stock fell over 4% on the Tokyo Stock Exchange, leading to a temporary trading suspension, while Honda's shares surged more than 8%, signaling investor confidence.  

Christopher Richter, a Japan autos analyst at CLSA, noted that control appeared to be a major issue. "Nissan's reluctance to become a Honda subsidiary suggests control was a key sticking point," he said. "Without securing control, Honda seems to be stepping away."  

Meanwhile, Nissan's alliance partner Renault, which holds a 36% stake in the company, had been open to the merger, raising questions about the future of their collaboration. Mitsubishi Motors, also part of the Nissan-Renault alliance, had considered joining the deal but may now reconsider.  

Despite reports of the merger's failure, both Nissan and Honda stated that no official announcements had been made. They confirmed that discussions about their future direction are ongoing, with an update expected by mid February.