In under 24 hours, the rumor has become reality. Nissan will acquire 34 percent of Mitsubishi Motors for 237 billion yen (about $2.17 billion). This makes Nissan the single-largest shareholder in the automaker.
Speaking at a press briefing announcing the deal, Nissan CEO Carlos Ghosn said this alliance will cover purchasing, common platforms, joint manufacturing, technology development, and target shared cost savings. The alliance will also contribute management expertise to help Mitsubishi regain public trust.
“It represents a win-win. We believe in the potential of Mitsubishi Motors,” said Ghosn.
In statements from the two companies, an agreement will be signed by May 25th where Nissan can name four directors to the Mitsubishi Motors board. Nissan can also name one of their directors as a chairman for Mitsubishi.
Osamu Masuko, chairman of Mitsubishi Motors explained the two companies have been discussing ways to extend their partnership for some time. Mitsubishi and Nissan currently have a deal concerning minicars. When the scandal came to light, the talks accelerated.
“We had to do something quite daring. It is not an easy task to restore trust,” said Masuko.
Makuko also notes that a takeover like this would have happened sooner or later due to Mitsubishi lacking the resources to compete effectively on its own.
“This would have happened one day,” he said.
This deal does open Nissan to possible issues concerning the problems facing Mitsubishi and how much money will need to be spent. Ghosn explained that Mitsubishi was very open about the scale of problems it faces and that Nissan would only complete the deal after it has done an investigation into the investment.
Source: Automotive News (Subscription Required), New York Times, Mitsubishi, Nissan
Press Release is on Page 2
Recommended Comments
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.