Nissan Obtains 34 Percent Equity Stake in Mitsubishi

Nissan has validated that it will obtain a 34 percent equity stake in Mitsubishi Motors (worth 237 billion yen or $2.2 billion) after the two companies signed a contract to form a brand-new tactical alliance. Both automakers have been working together to some extent for the past half a decade, thereby lengthening the existing collaboration under this new arrangement. The new alliance will directly impact purchasing, typical platforms, joint production, and technology advancement.

Carlos Ghosn, Nissan’s president said in a statement, “This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors.”

Mitsubishi Motors president and chairman of the board Osamu Masuko stated, “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.”

As part of the agreement, Nissan will buy 506.6 million new shares of Mitsubishi Motors priced at 468.52 yen or $4.31, making them the biggest shareholder of Mitsubishi. Mitsubishi Heavy Industries, Mitsubishi Corporation, and The Bank of Tokyo– Mitsubishi UFJ are anticipated to maintain a significant collective ownership stake of Mitsubishi Motors and support its alliance with Nissan. The collaboration with Nissan is still based on a conclusive Alliance Agreement, which is anticipated at the end of May 2016.