Nissan Motor is reportedly planning to end its merger discussion with Honda Motor Co.

A Reuters report on Wednesday said that Nissan’s board will meet in the near future to decide the course of action.

In December last year, the Japanese firms had signed a memorandum of understanding (MoU) to start discussions and considerations toward a business integration between them through the establishment of a joint holding company.

The report added that the talks have been complicated by growing differences on both sides and that Nissan’s board will meet soon to discuss calling off the talks after Honda indicated that the former would become its subsidiary.

This was unacceptable to Nissan, which felt that such a structure would be a deviation from the original plan that the proposed merger will be that of equals. Nissan is now undertaking a turnaround plan, by which it plans to reduce 9,000 employees and 20 per cent of global capacity.

Japan’s Asahi Shimbun newspaper also reported that the merger could be called off.

Responding to the reports, Nissan said that it is holding ‘various discussions’ with Honda.

“Based on the memorandum of understanding signed on December 23 last year, Honda and our company are in the stage of advancing various discussions, including the contents of the report, and we plan to establish a direction and make an announcement around mid-February,” the company said in a statement.

In December, Nissan had said that the MoU with Honda was aimed to serve as an option to maintain global competitiveness and for the two companies to continue to deliver more attractive products and services to customers worldwide.

Earlier in March that year, in a bid to further accelerate their efforts toward achieving a carbon-neutral society and a zero-traffic-fatality society, the two had signed an MoU regarding a strategic partnership for the era of vehicle intelligence and electrification. Since then, the two companies had held discussions aimed at collaboration in various fields.

On August 1, both companies signed another MoU to deepen the framework of the strategic partnership. The auto makers also announced that they had agreed to carry out joint research in fundamental technologies in the area of platforms for next-generation software-defined vehicles.