Nissan Motor has agreed to take a 34 per cent stake worth $2.2 billion in Mitsubishi Motors Corp., Nissan Chief Executive Carlos Ghosn said on Thursday.<\/p>\n
Ghosn told reporters at a joint news conference in Yokohama, Japan the stake gave Nissan de facto control in its smaller, scandal-hit rival, Mitsubishi Motors Corp.<\/p>\n
He said the two would now share and jointly develop technology, and could realise `billions\u2019 in synergies by coordinating purchasing, plant utilisation and cooperating in growth markets.<\/p>\n
“We believe this will be a win-win situation. We believe we can help and support and grow together, better than if Mitsubishi was doing this on its own,” he said.<\/p>\n
Ghosn said Nissan would be able to nominate a third of Mitsubishi Motors’ board, adding he believed that would also be led by a Nissan executive.<\/p>\n
Ghosn said he had been `reassured\u2019 by Mitsubishi Motors’ Chief Executive Osamu Masuko over the size and scope of the fuel economy troubles, which Masuko said had accelerated discussions.<\/p>\n
Mitsubishi admitted last month that it overstated the fuel economy of at least four of its models – mini cars sold in Japan, including two sold under Nissan’s badge.<\/p>\n
The deal is a lifeline for Mitsubishi Motors, which is mired in its third scandal in two decades, but should also be a boost for Nissan.<\/p>\n
Japan’s number two car maker has struggled to make inroads into Asia outside China, in countries like Thailand and the Philippines, where Mitsubishi’s models are popular.<\/p>\n
Mitsubishi and Nissan already cooperate on development and manufacturing with a partnership dating back to 2011, but that deal did not currently involve any cross-shareholding.<\/p>\n
Under Thursday’s deal, which both companies said will help Mitsubishi `regain trust\u2019, Mitsubishi Motors will issue new shares to Nissan at a 5.3 per cent discount to raise 237.4 billion yen ($2.18 billion).<\/p>\n
That will hand Nissan just over a third of the group – enough to wield control, under Japanese shareholding rules.<\/p>\n
That has badly hit Mitsubishi, wiping $3 billion off its value and bruising a brand already losing market share, as investors fretted over potential compensation costs.<\/p>\n
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