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Nissan invests $2.2bn controlling shares in Mitsubishi Motors

Nissan Motor has agreed to take a 34 per cent stake worth $2.2 billion in Mitsubishi Motors Corp., Nissan Chief Executive Carlos Ghosn said on Thursday.

Ghosn told reporters at a joint news conference in Yokohama, Japan the stake gave Nissan de facto control in its smaller, scandal-hit rival, Mitsubishi Motors Corp.

He said the two would now share and jointly develop technology, and could realise `billions’ in synergies by coordinating purchasing, plant utilisation and cooperating in growth markets.

“We believe this will be a win-win situation. We believe we can help and support and grow together, better than if Mitsubishi was doing this on its own,” he said.

Ghosn said Nissan would be able to nominate a third of Mitsubishi Motors’ board, adding he believed that would also be led by a Nissan executive.

Ghosn said he had been `reassured’ by Mitsubishi Motors’ Chief Executive Osamu Masuko over the size and scope of the fuel economy troubles, which Masuko said had accelerated discussions.

Mitsubishi admitted last month that it overstated the fuel economy of at least four of its models – mini cars sold in Japan, including two sold under Nissan’s badge.

The deal is a lifeline for Mitsubishi Motors, which is mired in its third scandal in two decades, but should also be a boost for Nissan.

Japan’s number two car maker has struggled to make inroads into Asia outside China, in countries like Thailand and the Philippines, where Mitsubishi’s models are popular.

Mitsubishi and Nissan already cooperate on development and manufacturing with a partnership dating back to 2011, but that deal did not currently involve any cross-shareholding.

Under Thursday’s deal, which both companies said will help Mitsubishi `regain trust’, Mitsubishi Motors will issue new shares to Nissan at a 5.3 per cent discount to raise 237.4 billion yen ($2.18 billion).

That will hand Nissan just over a third of the group – enough to wield control, under Japanese shareholding rules.

That has badly hit Mitsubishi, wiping $3 billion off its value and bruising a brand already losing market share, as investors fretted over potential compensation costs. – Reuters

Sunday Olatunji
Dele Fashomi, seasoned journalist and communication teacher, is a holder of Master of Arts degree in Communication and Language Arts from the University of Ibadan in 1992/93. Earlier, he had bagged a Bachelor degree from the same university in 1984, after which he proceeded to the Nigerian Institute of Journalism, Lagos, in 1990, for a postgraduate diploma in Journalism. He had done many courses in communication, including the EU-BBC Editing Course in 2002. Mr. Fashomi combines effectively the practice, research and teaching of communication. And to date, he has published two academic works in communication: Issues in Communication Technology and Policy (2010) and Economic and Social Issues in Advertising and PR (2013). He had his first break in the Nigerian media in Concord Newspapers in 1990 and today, he has over two and half decades experience earned in several newspapers. He has been part of many start-ups, such as The Republic (1987), The Comet (1999), The Anchor 2001 - 2002; Sun Newspapers (2003); Westerner newsmagazine (2005 - 2010) as Editor; National Life (2011) as Sunday Editor, and Newswatch Newspapers (2012- 2016) as Daily Editor. Dele Fashomi is now the Publisher/Editor-in-Chief of newspaper online, which he started in July 2015. He is also into biography writing, with many books in his trail, some of which he wrote alone and one he co- authored with his mentor, Mr Dare Babarinsa, entitled:  Olabiyi Durojaiye - DARE TO BE DiFFERENT. He also guided and collaborated with Pa Olatunji Odusanya in writing his autobiography - AGAINST ALL ODDS. There are many other books in the works under his pen.