KKR & Co. is considering an investment in Nissan Motor Co. after the automaker’s merger talks with Honda Motor Co. collapsed. 

The US-based private equity firm is evaluating an equity or debt stake to strengthen Nissan’s financial position, though no final decision has been made. Nissan, struggling with an outdated product lineup and deep discounting, is actively seeking a new partner, ideally in the US technology sector, after its planned tie-up with Honda failed.

KKR has a strong presence in Japan, with the country accounting for 39% of its Asia Pacific portfolio. The firm has achieved a gross internal rate of return of approximately 40% on its Japanese investments, with a 2.2x multiple on invested capital across 12 transactions since 2010. Its notable deals include the relisting of Hitachi Ltd.’s former chip equipment division, now Kokusai Electric Corp., and investments in Seiyu, Bushu Pharma, and NetStars. 

The firm is currently involved in multiple transactions in Japan, recently increasing its bid for Fuji Soft Inc. to counter Bain Capital and exploring a stake in Seven & i Holdings Co.’s proposed buyout by its founding family.

Beyond KKR, other firms are interested in Nissan. Foxconn has expressed interest in acquiring Renault’s 36% stake in the automaker, with its chairman stating the company seeks a partnership rather than a full takeover. KKR has prior experience in the auto sector, having invested in Japanese parts supplier Marelli Holdings Co. 

Despite losing its initial $2bn investment in a 2022 restructuring, KKR reinvested $650m, and the company has since returned to profitability. With Nissan at a critical juncture, private equity firms could play a key role in shaping its future.