In a very difficult moment for Mitsubishi, the save comes from its denouncer. Nissan and Mitsubishi Motors Corporation announced that they have signed a Basic Agreement to form a strategic alliance. This means Nissan will take a 34 percent equity stake in Mitsubishi for 237 billion yen.
The strategic alliance will extend an existing partnership between Nissan and MMC, under which the two companies have jointly collaborated for the past five years. We must not forget that Nissan was the manufacturer who announced that its partner, Mitsubishi, cheated in Japan`s consumption tests.
Nissan and Mitsubishi have agreed to cooperate in areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilization and growth markets.
Under the terms of the transaction, Nissan will purchase 506.6 million newly issued MMC 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 decision by Nissan to acquire a strategic stake in Mitsubishi marks the latest expansion of its Alliance model, built around a 17-year cross shareholding arrangement with Renault. Nissan has also acquired stakes or signed partnerships with other automotive groups including Daimler, and AvtoVaz.
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.”