Nissan to buy 34% controlling stake in Japanese rival Mitsubishi
Nissan and Mitsubishi have this week announced that the former will buy a 34% controlling stake in the latter. Should Toyota be concerned?
It’s been quite a week for Mitsubishi. It started with the ailing Japanese car firm admitting that it had falsified fuel-efficiency ratings. It ended with it being taken over by rival Nissan.
On Thursday, Nissan chief executive Carlos Ghosn announced that his company will be buying a 34% controlling stake in Mitsubishi for $2.2 billion.
The deal is still subject to regulatory approval, and needs to secure the backing of Mitsubishi shareholders, before it goes ahead. That didn’t stop Ghosn, though, saying it was “a breakthrough transaction and a win-win” for both companies.
The Nissan announcement comes in the wake of a scandal at Mitsubishi earlier in the week, which saw the firm admit to having knowingly manipulated fuel economy tests on some of its subcompact models around the world.
What’s interesting is that the scandal actually impacted Nissan too, as it had rebadged and sold affected Mitsubishi models under its own brand.
If approved – which is expected to take until at least the end of the year – the deal would make Nissan the largest shareholder in Mitsubishi Motors.
Being hailed by both companies as a “strategic alliance”, the deal will further strengthen ties between the two Japanese automakers, who have been jointly collaborating for five years now.
It’s thought that both companies will be involved going forward in various areas, including purchasing, technology and sharing platforms.
“We will support Mitsubishi Motors as they address their challenges and welcome them as the newest member of our enlarged alliance family,” added Ghosn.
By ‘alliance family’ he was predominantly referring to Nissan’s 17-year cross shareholding agreement with French carmaker Renault. However, it should be noted that Nissan has previously secured shares or signed agreements with other carmakers, including Daimler.
The chief executive at Mitsubishi Motors, Osamu Masuko, said he hoped the deal would help restore confidence in his company.
“It is not an easy task to regain trust, so through the alliance with Nissan, we will be starting a path towards tackling this difficult task,” he said.
So what can we expect to see if the deal is indeed approved? Who knows, but one thing is for sure: Toyota will be following every future development very closely.
The post Nissan to buy 34% controlling stake in Japanese rival Mitsubishi appeared first on JDMRACING.