Nissan board agrees to scrap $60b Honda merger talks

TOKYO, Feb 05 (Reuters): Nissan is set to call off merger talks with rival Honda, a source said on Wednesday, abandoning a $60 billion plus tie-up that would have created the world's no.3 automaker and raising questions about how it will drive a turnaround by itself.

Talks have been complicated by growing differences between the two Japanese automakers, two people familiar with the matter, both of whom declined to be named because they were not authorised to speak to the media, said earlier.

Nissan shares slid more than 4 per cent on the Tokyo Stock Exchange, which temporarily suspended trading in the stock after a Nikkei business daily report that it would pull out. Honda shares continued to trade and finished the day up more than 8 per cent, in a sign of apparent investor relief.

The development will raise fresh questions about how hard-hit Nissan, which is in the middle of a turnaround plan and aims to cut 9,000 employees and 20 per cent of global capacity, can ride out its latest crisis without external help.