Nissan to Spend $2.2 Billion for Controlling Stake in Mitsubishi

Steph Willems
by Steph Willems
nissan to spend 2 2 billion for controlling stake in mitsubishi

Yesterday’s vague Japanese media reports proved right this morning, as Nissan Motor Co. announced it will purchase a 34 percent controlling stake in scandal-plagued Mitsubishi Motors.

Taking advantage of Mitsubishi’s reduced market value following the company’s admission of cheating on Japanese fuel economy tests, Nissan’s 237 billion yen ($2.2 billion) bulk buy of shares makes it the automaker’s largest shareholder.

It’s a big win for Nissan, which can take credit for exposing the gas mileage scandal less than a month ago.

The new alliance, expected to be made official on May 25, opens up a number of opportunities for Nissan, which entered into a small-scale partnership with Mitsubishi five years ago. That joint venture yielded Japanese “kei” cars, giving Nissan an inroad into the minicar market.

Now, Nissan can share technology between the two companies, develop joint vehicle platforms, share assembly plants, and tap into growth markets.

“We will be the largest shareholder of MMC, respecting their brand, their history and boosting their growth prospects,” said Nissan president and CEO Carlos Ghosn in a statement. “We will support MMC as they address their challenges and welcome them as the newest member of our enlarged Alliance family.”

Ghosn said his company stands to realize “billions of dollars in one time and continuing synergies,” through the deal.

Osamu Masuko, chairman and CEO of Mitsubishi, said the alliance would “create long-term value needed for our two companies to progress towards the future.”

Nissan, which already has a 17-year strategic partnership with Renault, will see its global footprint expand once again when the deal becomes official. The company holds shares in Daimler and AvtoVaz as well.

As part of the deal, a Nissan-appointed chairman will take control of Mitsubishi, with a number of Nissan executives added to its board of directors (in proportion to the company’s stake).

[Source: Bloomberg]

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3 of 54 comments
  • Seanx37 Seanx37 on May 12, 2016

    I don't get it. Why? What does Mitsubishi do that Nissan/Renault can't do better? Or doesn't already do?

  • Sector 5 Sector 5 on May 13, 2016

    Fuji heavy industries loses a liability. Spare all the consolidation. Manufacturers are working towards their own demise with automonous technology. Private ownership down. Car pooling up. Only the wealthy will own & drive their own. They'll get sued the pants for the accidents they create.

    • Lorenzo Lorenzo on May 14, 2016

      Fuji makes Subarus. Mitsubishi Motors is a spinoff of Mitsubishi Heavy Industries and part of the Mitsubishi keiretsu, a group of companies that own stock in each other, but are otherwise independent.