What started as a rumor turned out to be true, as Nissan signed a partnership through which it became the largest shareholder of Mitsubishi Motors.
Nissan Motor Company has announced in a press release published today that they have signed a Basic Agreement with Mitsubishi Motors. The historic deal will form a strategic alliance between the two automakers.
Confirming previous reports, Nissan has announced it will purchase a 34% equity stake in Mitsubishi Motors Company, for which it will pay 237 billion yen, the rough equivalent of $2.2 billion.
MMC will first issue new shares for Nissan to purchase, thus strengthening a partnership that began five years ago.
The deal between Nissan and Mitsubishi involves the purchase of 506.6 million newly-issued shares from Mitsubishi, at a price of 468.2 yen per share.
As the two partners explained, the price reflects Mitsubishi Motors Corporation’s average stock value between April 21, 2016, and May 11, 2016.
The period described is exactly the time when Mitsubishi’s fuel economy scandal erupted and when their stock value dropped significantly.
In spite of a strong link between the acquisition and the drop in Mitsubishi share value, Nissan and its new partner claim they wanted to sign this deal for some time, and there is no link between it and the fuel economy scandal.
Nissan and Mitsubishi will work together to save money and will collaborate in a number of areas, including purchasing, shared vehicle platforms, technology sharing, joint plant utilization, and growth markets. In other words, the two companies will gather their networks and resources to shed costs in areas where one of the partners lost money.
Carlos Ghosn, CEO and President of Nissan, described this transaction as a “win-win for both Nissan and Mitsubishi Motors.” Ghosn sees the partnership as an intensive cooperation that will generate “sizeable synergies.”
Nissan’s President and CEO promised to respect Mitsubishi Motor Company’s brand and history while being their new largest shareholder. Furthermore, Mr. Ghosn pledged to boost Mitsubishi’s growth prospects, as well as address the brand’s unique challenges.
Confirming previous reports, Nissan has announced it will purchase a 34% equity stake in Mitsubishi Motors Company, for which it will pay 237 billion yen, the rough equivalent of $2.2 billion.
MMC will first issue new shares for Nissan to purchase, thus strengthening a partnership that began five years ago.
The deal between Nissan and Mitsubishi involves the purchase of 506.6 million newly-issued shares from Mitsubishi, at a price of 468.2 yen per share.
As the two partners explained, the price reflects Mitsubishi Motors Corporation’s average stock value between April 21, 2016, and May 11, 2016.
The period described is exactly the time when Mitsubishi’s fuel economy scandal erupted and when their stock value dropped significantly.
In spite of a strong link between the acquisition and the drop in Mitsubishi share value, Nissan and its new partner claim they wanted to sign this deal for some time, and there is no link between it and the fuel economy scandal.
Nissan and Mitsubishi will work together to save money and will collaborate in a number of areas, including purchasing, shared vehicle platforms, technology sharing, joint plant utilization, and growth markets. In other words, the two companies will gather their networks and resources to shed costs in areas where one of the partners lost money.
Carlos Ghosn, CEO and President of Nissan, described this transaction as a “win-win for both Nissan and Mitsubishi Motors.” Ghosn sees the partnership as an intensive cooperation that will generate “sizeable synergies.”
Nissan’s President and CEO promised to respect Mitsubishi Motor Company’s brand and history while being their new largest shareholder. Furthermore, Mr. Ghosn pledged to boost Mitsubishi’s growth prospects, as well as address the brand’s unique challenges.