Nissan Motor Co. has agreed to buy a 34 percent stake in Mitsubishi Motors Corp., vowing to rebuild trust in the automaker that has been hit by a scandal involving falsified fuel-efficiency data.
The stake will be purchased for nearly US$2.2 billion, giving Nissan effective control of the smaller Japanese rival.
Under the deal announced Thursday, Mitsubishi Motors will issue new shares to Nissan at a 5.3 percent discount to Wednesday closing share price, raising 237.4 billion yen, Reuters reported.
The agreement will be a lifeline for Mitsubishi Motors, which has seen US$3 billion in market value getting wiped off after confessing to manipulating fuel economy data.
Mitsubishi and Nissan already cooperate on development and manufacturing with a partnership dating back to 2011, but that deal does not currently involve any cross-shareholding.
Nissan Chief Executive Carlos Ghosn said the two automakers will now share and jointly develop technology, and could realize “billions” in synergies by coordinating purchasing, plant utilization and cooperating in growth markets.
“We are determined to preserve and nurture the Mitsubishi Motors brand. We will help this company address the challenges it faces, particularly in restoring consumer trust in its fuel economy performance,” Ghosn was quoted as saying at a news conference in Yokohama.
Mitsubishi Motors admitted last month it overstated the fuel economy of at least four of its models.
Ghosn said he had been “reassured” by Mitsubishi Motors’ CEO Osamu Masuko over the size and scope of the fuel economy troubles.
– Contact us at [email protected]