(Bloomberg) -- Nissan Motor Co. pursuing a deal with Honda Motor Co. indicates the former is in “panic mode,” according to Carlos Ghosn, the ex-chairman of the struggling Japanese automaker.
“It’s a desperate move,” Ghosn said Friday on Bloomberg Television. “It’s not a pragmatic deal because frankly, the synergies between the two companies are difficult to find.”
Honda confirmed this week it’s considering several options including a merger, capital tie-up or establishment of a holding company with Nissan. While Hon Hai Precision Industry Co. also has shown interest in Nissan, the Taiwan-based manufacturer of iPhones known as Foxconn is putting its pursuit on hold, Bloomberg News reported earlier Friday.
Nissan and Honda operate in the same markets with similar brands and products, Ghosn said, casting doubt on the merits of the two combining. He believes Japan’s Ministry of Economy, Trade and Industry has pushed Honda to go forward with a deal.
“They’re trying to figure out something that could marry the short-term problems of Nissan and the long-term vision of Honda,” Ghosn said. While there is “no industrial logic” to a deal, “there is a moment where you have to choose between performance and control.”
Ghosn, 70, has resided in Beirut since his daring escape from Japan five years ago this month. While on bail facing charges of financial misconduct, he hired a father-son extraction team to smuggle him onto a private plane in a music-equipment box and flew to Lebanon, which rarely extradites its citizens.
Nissan and Ghosn continue to wage legal battles against one another more than six years after executives within the automaker arranged for his arrest and ouster from the company. The manufacturer has claimed that its former chairman under-reported his income and misappropriated company assets for personal gain. Ghosn has denied the allegations and accused Nissan of damaging his finances and reputation.
Ghosn said Friday he appreciates why Foxconn — which is in the midst of a years-long effort to crack the electric-car market — would be interested in buying an auto company on the cheap.
“I can understand that a company like Foxconn — headed by very serious and realistic management — is going to say, ‘You know what, instead of us investing to do our own electric car, let’s buy a car company,’” Ghosn said. “They’re not going to be the only one to try to do that.”
(Updates with additional comments starting in fourth paragraph.)
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