MNI China Daily Summary: Wednesday, March 12

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MNI: US MBA: MARKET COMPOSITE +11.2% SA THRU MAR 07 WK

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AUTOMOTIVE: Nissan (NSANY Baa3[N]/BB+[N]/BBB-[N]): Hon Hai Links Resurface

AUTOMOTIVE
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Marginally credit supportive development, but hard to read too much into this for now. Hon Hai is unlikely to get control and has no magic bullet to fix operational issues.

  • The push to combine Nissan with Honda last year seemed to be triggered by national protectionism when Hon Hai (Foxconn) was interested in taking a stake.
  • Now that the planned combination looks set to fall through, Hon Hai has rekindled its interest, according to CNA.
  • A- rated, Hon Hai would be a strong partner financially with a $75bn EV and $36bn cash on its balance sheet; Nissan’s market cap is around $11bn. A strategic stake, possibly buying out Renault, seems more likely than a full takeover.
  • The Japanese government would clearly prefer a domestic solution, with officials still reiterating hopes for the deal. That could be a major stumbling block here.
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Marginally credit supportive development, but hard to read too much into this for now. Hon Hai is unlikely to get control and has no magic bullet to fix operational issues.

  • The push to combine Nissan with Honda last year seemed to be triggered by national protectionism when Hon Hai (Foxconn) was interested in taking a stake.
  • Now that the planned combination looks set to fall through, Hon Hai has rekindled its interest, according to CNA.
  • A- rated, Hon Hai would be a strong partner financially with a $75bn EV and $36bn cash on its balance sheet; Nissan’s market cap is around $11bn. A strategic stake, possibly buying out Renault, seems more likely than a full takeover.
  • The Japanese government would clearly prefer a domestic solution, with officials still reiterating hopes for the deal. That could be a major stumbling block here.