Nissan increases share holding of Mitsubishi Motors to 34 per cent, assumes control of company
Nissan and Mitsubishi Motors have announced that Nissan will acquire 506.6 million newly created Mitsubishi Motors shares at a total price of 237 billion yen. Nissan’s purchase expands their shareholding of Mitsubishi to 34 per cent, and under Japanese law, this entitles Nissan to a controlling stake in Mitsubishi.
Nissan and Mitsubishi have worked together overseas for around five years and the acquisition could be considerably beneficial for both nameplates. The deal could be especially beneficial Mitsubishi, who has regained ground with its new Triton and Pajero Sport models, but is struggling to find a replacement for the ageing Lancer and form a strong light car portfolio in some markets, including Australia.
The deal will see Mitsubishi and Nissan share a number of resources including platforms, manufacturing facilities and marketing activities.
Carlos Ghosn, chief executive and president of Nissan, announced “this is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors. It creates a dynamic new force in the automotive industry that will cooperate intensively, and generate sizeable synergies. We will be the largest shareholder of MMC, respecting their brand, their history and boosting their growth prospects. We will support MMC as they address their challenges and welcome them as the newest member of our enlarged Alliance family.”
Osamu Masuko, chairman of the board and chief executive of Mitsubishi Motor Company, said that “through its long history of successful partnerships Nissan Motor has developed a deep knowledge of maximizing the benefits from alliance partnerships. This agreement will create long term value needed for our two companies to progress towards the future. We will achieve long term value through deepening our strategic partnership including sharing resources such as development, as well as joint procurement.”
The deal is still subject to the Alliance Agreement, which is due to take place at the end of May 2016, and the transaction is due to be finalised at the end of the year. Mitsubishi Heavy Industries, Mitsubishi Corporation and the Bank of Tokyo are expected to continue as the additional share holders of Mitsubishi Motors.
In addition to Mitsubishi Motors, Nissan has a 17-year shareholder agreement with Renault and may be forming partnership with other manufacturers, including Daimler, in future.