EMBATTLED Japanese car maker Mitsubishi Motors may well have found its saviour, with rival car maker Nissan set to take a 34 percent stake in the company.
Mitsubishi has forged a far-reaching strategic alliance with rival Nissan, with the latter spending $2.9 Billion to build on its existing joint collaboration agreement, in place for the last five years.
Nissan and Mitsubishi (MMC) have agreed to cooperate in areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilisation and growth markets.
“We will be the largest shareholder of MMC, respecting their brand, their history and boosting their growth prospects,” CEO and Nissan president Carlos Ghosn said. “We will support MMC as they address their challenges and welcome them as the newest member of our enlarged Alliance family.”
Under the terms of the transaction, Nissan will purchase 506.6 million newly-issued MMC shares at a price of $5.89 AU per share.
MMC and Nissan expect Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo – Mitsubishi UFJ to maintain a significant collective ownership stake in Mitsubishi Motors, and to support the strategic alliance.
The transaction is subject to the signing of a definitive Alliance Agreement, expected by the end of May, 2016, the signing of a shareholders agreement with the current Mitsubishi Group shareholders of MMC and regulatory approvals. It is expected to close by the end of the year.
The decision by Nissan to acquire a strategic stake in MMC 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.
MMC will also propose Nissan nominees as board directors in proportion to Nissan’s voting rights, including a Nissan nominee to become Chairman of the Board.