The proposed management integration of Kanadevia and Nippon Steel Engineering was called off because of an unbridgeable gap over the equity stakes in the surviving or newly established company. It has been suggested that Honda and Nissan may also have been affected by developments related to the matter.
The management integration talks between major plant engineering company Kanadevia (formerly Hitachi Zosen) and Nippon Steel Engineering, a subsidiary of Nippon Steel, ended without the companies finding a landing point for the integration. The plan was intended to create Japan's leading plant engineering business and support its global expansion, but the talks broke down.
The decisive issue is reported to have been an unbridgeable gap over the equity stakes in the surviving and newly established companies. The difficulty in reaching an agreement on the equity ownership structure is said to have undermined the conditions underlying the integration.
The development is expected to affect Honda and Nissan as well. There is a view that the ownership structure and the viability of the integration could affect procurement and cooperation involving parts, including vehicle components, and engineering services.
In future updates, the focus will be on whether the two companies explore a different integration strategy or pursue separate strategies. Attention is also turning to formal decisions and developments involving new partnerships.