Japanese automobile manufacturer Nissan Motor completed the acquisition of 34 percent stake in Mitsubishi Motors, taking a controlling position in the company.
The $2.3bn investment will see Nissan‘s Chief Executive Carlos Ghosn taking over as Chairman of scandal-plagued automaker struggling to recover from a mileage scandal. Osamu Masuko will remain the company’s president and CEO of Mitsubishi.
With this deal, Mitsubishi will be part of the global Alliance with Nissan and Renault. Nissan owns 43% stake in French automobile manufacturer Renault.
The new addition will make the alliance the world’s top three automotive groups by global volumes, the company claimed.
Commenting on the new deal, Carlos Ghosn said: “The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making.”
“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,” he added.
Initially announced in May this year, the deal will help both the companies to join hands in areas including purchasing, technology and sharing platforms.
The decision to shares in Mitsubishi came after the company admitted to falsifying the mileage of its four minivehicle models.
According to Ghosn, with this deal Nissan would target synergy benefits worth 24 billion yen in fiscal year 2017, rising to 60 billion yen in fiscal year 2018 and beyond.
“At a time of unprecedented change in the global auto industry, this strategy will build on our existing strengths and management capabilities to ensure increased competitiveness, better products for our customers and attractive returns for shareholders,” he added.
Besides chairman-elect Ghosn, the company will nominate three representatives to the Board of Mitsubishi.