Nissan buys controlling stake in Mitsubishi
Nissan Motor Co. has announced that it will purchase a 34% controlling stake in Mitsubishi Motors.
Following a Mitsubishi Motors (MMC) share issue, Nissan will buy an equity stake for the equivalent of US$ 2.2 billion. Mitsubishi’s stock value plummeted recently after it emerged that the company was cheating on Japanese fuel economy tests for a decade, mostly involving its mini “kei” cars. Apparently the breach was spotted by Nissan themselves, who were selling the same kei cars with Nissan badging as well.
The “strategic alliance” will extend an existing partnership between Nissan and MMC, under which the two companies have jointly collaborated for the past five years. Nissan and MMC have agreed to cooperate in “areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilisation and growth markets,” as per the announcement.
The decision by Nissan to acquire a strategic stake in Mitsubishi’s motoring arm marks the latest expansion of its Alliance model, “built around a 17-year cross-shareholding arrangement with Renault.” Nissan has also acquired stakes or signed partnerships with other automotive groups including Daimler and AvtoVaz.
Photo coutesy of Malaysia Chronicle.