By Maki Shiraki

TOKYO (Reuters) -Nissan ( NSANF ) CEO Makoto Uchida met with his Honda counterpart Toshihiro Mibe on Thursday to tell him he wants to scrap their memorandum of understanding (MOU) to discuss a possible merger, one person with knowledge of the matter said.

The termination of talks followed a proposal from Honda to make Nissan ( NSANF ) a subsidiary, which was not part of the original plan, the source said, declining to be identified because the matter is not public.

The two Japanese automakers announced plans in December to discuss an integration under a holding company, but the talks have been complicated by growing differences, according to multiple people familiar with the matter.

Nissan ( NSANF ) will formalise the decision to withdraw from the MOU at a board meeting to be held before the company's third-quarter earnings announcement next week, the person said.