It’s official! Nissan and Mitsubishi Motors Corporation have announced that they’ve signed a Basic Agreement to form a far-reaching strategic alliance between the two Japanese automakers. Based on this agreement, Nissan will take a 34% equity stake in Mitsubishi for 237 billion yen or about RM8.7 billion.
The strategic alliance will extend an existing partnership between Nissan and MMC, under which the two companies have jointly collaborated for the past 5 years.
Nissan and MMC have agreed to cooperate in areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilization and growth markets.
Carlos Ghosn, chief executive and president of Nissan, 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. 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.”
Osamu Masuko, chairman of the board and chief executive of Mitsubishi, said, “Through its long history of successful partnerships Nissan Motor has developed a deep knowledge of maximizing the benefits from alliance partnerships. 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.”
Under the terms of the transaction, Nissan will purchase 506.6 million newly-issued Mistubishi shares at a price of 468.52 yen per share. The price per share reflects the volume weighted average price over the period between April 21 2016 and including May 11 2016. Nissan will become the largest shareholder of MMC on closing.
The transaction is subject to the signing of a definitive Alliance Agreement, expected by the end of May, 2016, the signing of a shareholders agreement with the current Mitsubishi Group shareholders of MMC and regulatory approvals. It is expected to close by the end of the year.
Ever since Mitsubishi admits that its Japanese-market cars sold since 1991 could have had faked fuel-economy data, shares of MMC have dropped by about half since the scandal was uncovered, opening the door for a takeover.
The emission scandal recently widens as MMC announced that besides the previously announced 4 mini-car models affected by this fake fuel economy tests results, there are 9 other models currently sold in Japan, as well as in other models no longer sold in Japan are also affected by improper manipulation of running resistance to present better fuel consumption rates.
Source: Mitsubishi
