Friday, May 13, 2016

Nissan acquires 34% controlling stake of Mitsubishi

Nissan Motor Company has acquired 34% of Mitsubishi Motors Corporation for ¥237 billion (nearly $2.2 billion) to effectively make it the latter's largest shareholder.


"This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors," said Nissan chief executive and president Carlos Ghosn. "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."

The newly-forged alliance between Nissan and Mitsubishi extends an existing partnership between the two Japanese car brands which both have collaborated on for the past five years. Under the new alliance, both Nissan and Mitsubishi will cooperate in areas "including purchasing, common vehicle platforms, technology-sharing, joint plant utilization and growth markets."

"Through its long history of successful partnerships Nissan Motor has developed a deep knowledge of maximizing the benefits from alliance partnerships," added Mitsubishi board chairman and chief executive Osamu Masuko. "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."

Nissan's acquisition of Mitsubishi follows the recent revelation that the latter has been submitting "better fuel consumption rates than the actual rates" to Japan's Ministry of Land, Infrastructure, Transport and Tourism. Ironically, it was Nissan that discovered the discrepancy as it was developing its next-generation vehicles--two of which are rebadged Mitsubishi vehicles, the Nissan Dayz (Mitsubishi eK Wagon) and the Nissan Dayz Roox (Mitsubishi eK Space)--by examining the fuel consumption figures of its competitors. 

There's no word yet on how this latest development will affect Mitsubishi's operations overseas, including the Philippines.

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