Nissan Motor President Makoto Uchida and Honda Motor President Toshihiro Mibe met on Thursday and agreed to suspend the two giant automobile firms' merger talks.

Uchida directly informed Mibe of the halt to the merger talks.

Nissan's board is in favor of abandoning merger talks with Honda, although calling them off has yet to be announced by executives at the two Japanese carmakers, a source close to the matter told AFP on Thursday.

"The latest conditions put on the table by Honda are unacceptable for Nissan... It needs to be formalized, but basically, it's over," a source said.

Nissan told Honda that it will scrap the memorandum of understanding signed in December regarding negotiations on a business integration between the two carmakers.

Nissan’s decision came as the companies were unable to agree on the valuation of each side under a holding company. Honda’s proposal to make Nissan its subsidiary also led to a backlash from Nissan. — with reports from AFP