NISSAN has swooped on troubled rival Mitsubishi, sinking $A3 billion to expand its stake in the rival Japanese carmaker and effectively taking control of it.
It’s picked up something of a bargain, too, with the scandal-wracked Mitsubishi’s share price struggling to rebound from revelations in late April it had for decades cheated on fuel emissions tests for Japanese market models.
Described by Nissan chief executive Carlos Ghosn as a “capital alliance” rather than a takeover, the investment makes Nissan the single largest shareholder in Mitsubishi, with a 34 percent stake in the carmaker – enough to give it control under Japanese business law.
Importantly, though, Reuters reports that the investment also gives Nissan a pathway into the South-East Asian market; one in which it has struggled and Mitsubishi has thrived.
Nissan and Mitsubishi already have a relationship formed in 2011 as part of a joint venture to develop next-generation microcars for the Japanese domestic market. Tellingly, it was the dodgy fuel numbers for Nissan-badged cars built by Mitsubishi that have sparked the latest crisis for the carmaker - and Nissan's timing for the takeover.
“This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors,” Ghosn said in an official statement from Nissan.
“It creates a dynamic new force in the automotive industry that will cooperate intensively, and generate sizeable synergies.”
He acknowledged Mitsubishi still has a hard road ahead of it.
“We will support MMC [Mitsubishi Motors Corporation] as they address their challenges and welcome them as the newest member of our enlarged Alliance family,” Ghosn said.
Strategically, the deal also has the potential to give Nissan inroads to Mitsubishi’s petrol-electric hybrid technologies, used on vehicles such as the Outlander SUV.
Following on from the initial announcement, Nissan has scheduled a press conference for later today to expand on what the takeover means for both companies.
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