Photo: edited by autoevolution
In the wake of the Dieselgate scandal, Mitsubishi Motors got into trouble due to a tiny little problem called false fuel mileage. The Japanese manufacturer came clean about this screw-up, admitting that it had been giving false mileage info for the better part of 25 years. As stock value plummeted and the carmaker was on the brink of going bust, Nissan saved the day with a 34 percent buyout.
Technically speaking, a buyout is the purchase of a big enough share of a given company to give the buyer control over management decisions and plenty other whatnots. Curiously enough, the majority stake Nissan bought in Mitsubishi mirrors that of Daimler's in the 2000s. Here’s hope this marriage won’t end after 69 months like Daimler’s did, if you know what I mean.
Announced in May 2016, the 237 billion yen buyout translates to roughly $2.2 billion at then’s exchange rates. Five months after the deal was signed, the big shots in the European Commission gave their blessing to Nissan. The executive body of the European Union is crucial in this situation, chiefly because Nissan is ultimately controlled by France-based Renault.
Here’s a straightforward explanation as to why the EC is needed in this case: “The Commission concluded that the proposed acquisition would raise no competition concerns, because the overlaps between the companies' activities were limited and a number of strong players would remain active in the markets concerned after the merger.” Pretty straightforward stuff.
The European Commission, which is presided by the Luxembourgish politician Jean-Claude Juncker since 2014, also notes that “the transaction was examined under the normal merger review procedure.” At the end of the day, Nissan was wise to buy a controlling stake in Mitsubishi. Not only does Nissan gain access to Mitsubishi’s technologies, but the manufacturer can also gain access to those markets where Mitsubishi fares better than Nissan does.
It’s a win-win situation if I’m honest. From Mitsubishi’s point of view, the 34 percent buyout means that the brand won’t go the way of the Dodo too soon. Oh, if only Mitsubishi were to focus on reviving the Lancer Evolution instead of crossover and SUVs... One can only hope for the best, right?
Announced in May 2016, the 237 billion yen buyout translates to roughly $2.2 billion at then’s exchange rates. Five months after the deal was signed, the big shots in the European Commission gave their blessing to Nissan. The executive body of the European Union is crucial in this situation, chiefly because Nissan is ultimately controlled by France-based Renault.
Here’s a straightforward explanation as to why the EC is needed in this case: “The Commission concluded that the proposed acquisition would raise no competition concerns, because the overlaps between the companies' activities were limited and a number of strong players would remain active in the markets concerned after the merger.” Pretty straightforward stuff.
The European Commission, which is presided by the Luxembourgish politician Jean-Claude Juncker since 2014, also notes that “the transaction was examined under the normal merger review procedure.” At the end of the day, Nissan was wise to buy a controlling stake in Mitsubishi. Not only does Nissan gain access to Mitsubishi’s technologies, but the manufacturer can also gain access to those markets where Mitsubishi fares better than Nissan does.
It’s a win-win situation if I’m honest. From Mitsubishi’s point of view, the 34 percent buyout means that the brand won’t go the way of the Dodo too soon. Oh, if only Mitsubishi were to focus on reviving the Lancer Evolution instead of crossover and SUVs... One can only hope for the best, right?
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