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Nissan Considers Buying a Third of Mitsubishi Motors

Mitsubishi Motors is going through a big scandal right now, as most of you already know if you are following us. Some analysts have predicted that Mitsubishi will not survive this scandal because of dwindling share value and massive compensations.
2016 Nissan Maxima 1 photo
Photo: Nissan
However, the three diamond brand might have a solution, and it's right in its neighborhood. We are talking about its current partners at Nissan, for which Mitsubishi is building Kei cars in Japan.

The same partners at Nissan, who should receive compensation from Mitsubishi because the latter manipulated fuel economy tests to make their cars, seem more frugal than they were.

Instead of turning its back to Mitsubishi and filing a lawsuit, Nissan is thinking about lending a helping hand full of Japanese Yen, their currency.

The reported amount is about 200 billion yen, so we would hold that check with two hands to ensure its safety. If you’re wondering how much that means in US dollars, it’s about $1.84 billion.

However, while Mitsubishi and Nissan did confirm talks about a potential strengthening of their collaboration, the two companies refuse to recognize any buyout plans. As explained in the Japanese business paper Nikkei, Nissan will not buy out Mitsubishi entirely, but just a third of their shares.

Some reports claim Nissan is considering the purchase of either 30 or 34% of Mitsubishi. Nikkei is reporting 30%, which would make Nissan Motor Company the biggest shareholder of Mitsubishi Motors. Currently, Mitsubishi Heavy Industries is Mitsubishi Motors' biggest shareholder, and they own 20% of stocks.

If you look at dwindling Mitsubishi Motors stock values, Nissan might be able to buy more for their 200 billion yen. Either way, the same report says that the two companies are already in the concluding stages of negotiations and are expected to hold board meetings on Thursday (that’s today) to decide on the tie-up.

Some of you are probably wondering what Nissan might want from Mitsubishi, as the former is significantly wealthier than the latter, and they both have models in roughly the same segments. However, Mitsubishi does have a strong presence in the Kei car segment in Japan, which represents 60% of domestic sales volume.

Furthermore, Nissan and Mitsubishi had plans to build an electric vehicle together, and Nissan might buy a third of Mitsubishi Motors stocks to ensure this still happens. We might also add that Mitsubishi has a successful plug-in hybrid SUV, while Nissan does not sell a model like it anywhere in the world, so the tie-up could also involve sharing this technology.
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About the author: Sebastian Toma
Sebastian Toma profile photo

Sebastian's love for cars began at a young age. Little did he know that a career would emerge from this passion (and that it would not, sadly, involve being a professional racecar driver). In over fourteen years, he got behind the wheel of several hundred vehicles and in the offices of the most important car publications in his homeland.
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