Nissan buys 34% stake in scandal-hit Mitsubishi

Nissan CEO Carlos Ghosn (L) & Mitsubishi Motors CEO Osamu Masuko (R)(C)AFP

Nissan is investing $2.2-billion to take a 34% stake in scandal-ridden Mitsubishi Motors Corp. in what Nissan Chief Carlos Ghosn said is "a win-win" deal intended to repeat the success of his Nissan-Renault alliance. Under the deal, Nissan becomes the top investor in Mitsubishi group companies - Mitsubishi Heavy Industries, trading company Mitsubishi Corp. and the Bank of Tokyo-Mitsubishi UFJ - will continue to hold stakes in the automaker, but they have agreed to support the alliance with Nissan, both sides said. Mitsubishi has been rocked recently by a scandal over cheating to inflate mileage for mini-car models.
Ghosn, who engineered Nissan's alliance with Renault, said: "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."
Adding Mitsubishi will be a plus in sharing platforms, purchasing and technology, and Nissan will benefit from its strengths in Southeast Asia, Ghosn said. The automakers will maintain separate identities, brands and dealerships, Ghosn and Masuko said. Under the deal, Nissan will purchase 506.6-million newly issued Mitsubishi Motors shares for 468.52 yen a share. The deal is still subject to a formal signing of an agreement, regulators' and shareholders' approvals, but is expected to close by the end of 2016. Nissan nominees will join the board at Mitsubishi Motors, including the chairman of the board.