Honda and Nissan’s drive to survive

One thing to start: UniCredit has raised its exposure to Commerzbank to 28 per cent, as the Italian lender escalated its pursuit of the German bank at the same time as going after domestic rival Banco BPM.

And a tech giant in limbo: The US Supreme Court said it would hear TikTok’s appeal against a divest-or-ban law that will determine the video app’s fate in the US. The law is set to go into effect on January 19.

In today’s newsletter:

Can Nissan and Honda create a global car giant?

Most car industry mergers end up as smouldering wrecks.

The famous collapse of Daimler–Chrysler is a warning case. Japan’s Nissan was more recent evidence, with the effective collapse of its two decade alliance with France’s Renault.

Now, Nissan may have a second shot.

Talks with fellow Japanese automotive stalwart Honda about some form of tie-up are at an early stage, the FT reported on Tuesday.

Investors are fans of the possible union, with shares in Nissan soaring 24 per cent on Wednesday. (Although a 3 per cent drop for Honda suggests that there’s skepticism over just how good a deal this would represent for the larger of the two companies.)

The pair already launched a partnership to develop electric vehicles and were in talks about other areas of co-operation.

It’s a rare thing for domestic arch-rivals to combine. A budding banker pitching a merger of Mercedes-Benz with BMW, or General Motors and Ford, would probably be laughed out of the boardroom.

But even the most successful of the established carmakers are facing a battle for survival, with Chinese rivals producing cut-price EVs (often with better technology) and consumers placing less stock in the badge that adorns the steering wheel.

Domestic megamergers have not been a big feature of life in corporate Japan in the past couple of decades, even as the prospect of global dealmaking involving Japanese groups has picked up (see 7-Eleven and Nippon Steel).

For Honda, the deal would give it greater scale. The resulting $52bn group would be the third-largest carmaker globally, ahead of General Motors or Stellantis. Access to Nissan’s underused EV technology would also give it a boost.

But for Nissan, the deal is nothing short of a lifeline as it’s searched for an anchor investor for months.

Honda is worth $44bn while Nissan was valued at just $8.2bn before Wednesday’s share run. An approach from a fellow Japanese group would be vastly preferable to a takeover by a foreign company.

The Japanese government and its powerful Ministry of Economy, Trade and Industry (Meti) will be watching with a mission, above all, to ensure that Japan’s industrial base is not eroded by the outcome.

If all goes well, the winners — alongside the inevitable roster of bankers and lawyers — will include activist fund Effissimo Capital Management, which built a Nissan stake to try and force changes amid a lacklustre performance at the business.

It’s just the latest indication of the growing influence that shareholder activism can have on corporate behaviour in today’s Japan.

The potential Nissan-Honda deal also marks a critical admission for corporate Japan, articulated by one senior government official this week.

The best time to consolidate was yesterday, he said. The second best time is today.

Lars Windhorst sets the record straight

Regular DD readers will be well acquainted with the exploits of Lars Windhorst, the racy German financier who has an uncanny knack for luring prestigious investors into his schemes despite repeated scandals.

But given how frequently the FT has exposed his murky dealings over the past decade, readers may be surprised that Windhorst agreed to sit down and be interviewed by our reporters. On camera.

In the resulting film, Lars gives his own account of some of his biggest blow-ups and scandals — from earning a criminal conviction to surviving a plane crash.

As well as his history of legal troubles, Windhorst is well known for his extravagant lifestyle, marked by trips around the world on superyachts and private jets.

Yet Windhorst told the FT that it’s a misconception that he was “flamboyant and someone who likes to show off” or that he was driven purely by money. 

“I think sometimes my shortcoming has been that I cared too little about money,” he said.

While it emerged in a London high court hearing last year that Windhorst had taken substantial loans from his companies and booked expenses such as private jet costs and luxury hotel bills through his businesses, he claimed that he had “very little pure personal expenditure”.

Instead, his expenses were largely related to his business as he works “seven days a week”.

Windhorst’s investment firm Tennor may still have several lawsuits hanging over it from aggrieved creditors, but the irrepressible financier is confident that his luck is about to turn.

“I feel very confident that even the Financial Times will be able to in the future write more positive things about me and Tennor than it has in the last 10 years,” he said.

Job moves

• Matt Miller, a London-based partner at Sequoia, will leave the venture capital firm to launch his own Europe-based fund, after a period transitioning out of his board seats. (He briefly sat on Klarna’s board of directors.)

• Simpson Thacher hired Bryan Robson and William Gwyn, two leveraged finance focused partners based in London. The two join from Sidley Austin.

• Crédit Agricole tapped company veteran Olivier Gavalda to replace outgoing chief executive Philippe Brassac. 

• James Jordan is joining investment manager Axonic Capital to focus on commercial real estate. He joins from Taconic, which abandoned its commercial real estate strategy.

Smart reads

Bending the knee What do Bank of America and OpenAI’s Sam Altman have in common? Both pledged to bankroll Donald Trump’s inauguration, as C-suites across corporate America throw their support behind the incoming US president.

‘Bondo’ TPG co-founder David Bonderman was part of a generation of buyout pioneers and made some of the industry’s boldest bets, the FT writes. He died last week aged 82. 

Paul Singer’s next act Activist hedge fund Elliott Management built multibillion-dollar stakes in major American corporations. Staffers say targets in Europe are falling by the wayside, Bloomberg reports.

News round-up

Federal Reserve cuts rates but ‘hawkish’ forecast hits stocks and sends dollar jumping (FT)

UniCredit lifts Commerzbank exposure to 28% (FT) 

Microsoft acquires twice as many Nvidia AI chips as tech rivals (FT) 

Porsche-Piëch family pushes for Volkswagen plant closures (FT) 

Start-up Vultr hits $3.5bn valuation in funding frenzy for AI cloud groups (FT)

Sam Altman-led nuclear start-up signs major AI power supply deal (FT)