In a nutshell: Honda and Nissan have agreed to end talks of a potential merger that would have led to the creation of the world's third-largest automotive group behind Volkswagen and Toyota, in that order. Unsurprisingly, the two sides couldn't come to terms on the structure of the combined company. Honda and Nissan took seats at the negotiating table in December 2024 to try and hammer out the details of what would have been a roughly $60 billion deal. Nissan's fortunes started taking a turn in early 2018 and many believed a merger between the two Japanese auto giants would have greatly improved their chances at mounting an offensive in the budding EV market.Several strategies were floated during negotiations. At one point, Honda proposed changing the structure of the deal going from a joint holding company where it would appoint the majority of directors and executives, to a plan in which Nissan would be a subsidiary of parent company Honda.Reuters noted several additional factors that could have also factored into the inability to get a deal done, including Nissan's pride and being in denial of its true position in the market. Nissan also has ties with Mitsubishi and Renault, which could have further complicated matters. Honda's subsidiary plan also reportedly rubbed some Nissan executives the wrong way, sources said.Ultimately, both sides agreed that in order to prioritize speedy decision making in the era of electrification, it would be best to cease discussions and terminate the memorandum of understanding signed back in December.Shares in Nissan are up just over four percent on the day as of writing while Honda stock is up close to two percent.Nissan, meanwhile, announced immediate measures to try and turn things around through a restructuring aimed at reducing costs by roughly 400 billion yen in fiscal year 2026. Honda recently opened pre-orders for its Afeela EV in collaboration with Sony, and announced plans to bring back the beloved Prelude as a hybrid.Image credit: TopSphere Media, John Cameron