The merger between Nissan and Honda to create the world’s third-largest carmaker is reportedly close to collapse.

Sources close to the deal have told Reuters that Nissan is set to call off merger talks with rival Honda, abandoning the £46bn tie-up.

Those sources say that talks have been complicated by growing differences between the two Japanese automakers.

The news has moved both companies’ share price – Nissan’s stock fell almost 5%, with trading briefly suspended after the Nikkei newspaper reported that it has called off merger talks with Honda.

Nissan is reportedly unhappy that Honda had suggested it could become a subsidiary, rather than the two companies joining together in a merger of equals.

Honda’s shares, which continued to trade, jumped over 8%.

According to Reuters, Nissan and Honda said in separate statements that the Nikkei report was not based on information announced by the companies and that they aimed to finalise a future direction by mid-February and announce it at that time.

The news that Honda, Nissan and Mitsubishi were in talks over a possible merger broke just before Christmas last year. If completed, it would combine Japan’s second- and third-largest carmakers, and add the smaller Mitsubishi, in a defensive effort to join forces as the automotive industry goes through its biggest ever period of upheaval