Nissan forks out billions for Mitsubishi

Nissan has confirmed it will acquire 34% of Mitsubishi in a deal worth just under AU$3 billion, making it the maker’s single largest shareholder. The deal is still subject to shareholder approval, but will provide Nissan with control over the company if it goes through after a formalisation of the alliance on 25 May.

Mitsubishi has been in the news recently for its fuel consumption cheating practices, resulting in a massive 43% stock price drop, so the timing couldn’t be better for the embattled car maker. The deal is being seen as a win-win for both auto makers, as supposed synergies will create reduced costs and improve economies of scale.

Mitsubishi’s brand has taken a hit from the cheating allegations, so it is hoped that the alliance will not only provide access to new products, but will also restore public trust through Nissan’s corporate governance and management expertise.