Nissan will buy 34% of a weakened Mitsubishi – publico

 
         

                 

                         
                     

                 

 
 

Nissan will buy a share of 34% in rival Mitsubishi, which has been losing market share and whose reputation took a blow last month after the company admitted that faked the consumption values fuel in some of its cars.

The deal, reported on Thursday, will cost the Nissan 237 billion yen (about 1900 million) and make this company the largest shareholder Mitsubishi. The largest shareholders are now two other group companies (Mitsubishi Heavy Industries and Mitsubishi Corporation) and the Bank of Tokyo.

The transaction was announced as a “strategic alliance” that will expand the partnership that two companies already have five years ago. The two companies will share technology and factories, and to cooperate in growing markets.

In the official announcement, the president of Nissan, Carlos Ghosn (who also leads the French Renault, with which Nissam has an alliance ), was keen to stress that the brands will remain independent and that the shareholder intends to maintain the identity of the Mitsubishi. “This is an important transaction and a win for both Nissan and for Mitsubishi Motors,” said the executive, in a statement. “We will be the largest shareholders of Mistsubishi Motors Corporation, respecting its brand, its history and boosting growth prospects.” The statement also includes an appeal to other major shareholders to retain their oppositions and “support the strategic alliance.”

The business that had arisen rumors in recent days, comes when the Mitsubishi is shaken by a scandal that made the sinking action. In late April, the manufacturer admitted that handled since the 1990s the results of fuel consumption tests for low-displacement cars sold in the Japanese market, some of which are manufactured to be sold by other brands including Nissan. Fakes tests affect various models of so-called mini-cars (with engine capacity less than 660 cm3), a popular category in Japan and the case led to the company’s executives publicly asked excuses.

After a sharp drop in the stock exchange, the price of Mitsubishi started to recover last week. On Thursday, the shares closed at 2.12% value on the Tokyo Stock Exchange. Nissan will buy about 507 million new shares of Mitsubishi, at a price reflecting the average price between 21 April and 11 May. The definitive purchase agreement will be signed this month and the two companies expect the transaction to be completed by the end of the year.