The Japanese companies’ decision to call off negotiations highlights the challenges legacy automakers face in partnering to tackle new technologies.

Nissan Motor Co. ( OTCPK:NSANY) and Honda Motor ( NYSE: HMC) have called off talks on a deal that would have created the world's third-largest carmaker. The development was widely anticipated after discussions had stalled in recent weeks to break off any merger momentum.

Two of the world’s largest carmakers have called off a multi-billion dollar merger after one of the suitors said the conditions of the deal were “unacceptable”.