Nissan has completed its acquisition of a 34% equity stake in Mitsubishi Motors and became its largest shareholder.
Mitsubishi will also become part of the global Alliance with Nissan and Renault. With the addition of Mitsubishi, the Alliance will be in the world’s top three automotive groups by global volumes, with sales of 10 million units in fiscal year 2016.
Nissan Chairman and Chief Executive Officer Carlos Ghosn has been appointed to become chairman of the Board. Ghosn announced that Nissan and Mitsubishi would collaborate on joint purchasing, deeper localization, joint plant utilization, common vehicle platforms, technology-sharing and an expansion of the companies’ combined presence in both developed and emerging markets.
“The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making,” said Ghosn. “It will be one of the world’s three largest automotive groups, with the economies of scale, breakthrough technologies and manufacturing capabilities to produce vehicles to serve customer demand in every market segment and in every geographic market around the world.”
Ghosn predicted that through its partnership with Mitsubishi, Nissan would target synergy benefits worth 24 billion yen in fiscal year 2017, rising to 60 billion yen in fiscal year 2018 and beyond. The gains will contribute to increased earnings per share worth an estimated 4 yen per share in fiscal year 2017 and 10 yen per share in fiscal year 2018 – on top of any earnings accretion linked to Nissan’s overall shareholding in Mitsubishi Motors.
Nissan offered its assistance at the request of Osamu Masuko, president and chief executive officer of Mitsubishi, following the company’s fuel economy crisis. The 2 companies have cooperated on kei-cars for the Japanese market over the past 5 years.
“We are committed to assisting Mitsubishi Motors as it rebuilds customer trust,” said Ghosn. “This is a priority as we pursue the synergies and growth potential of our enlarged relationship.”
— Nissan Motor (@NissanMotor) October 20, 2016