Nissan to acquire 34% stake in Mitsubishi

Nissan has revealed that it plans to acquire 34% stake in Mitsubishi Motors for a sum of 237 billion Yen (US $ 2.2 billion). The deal, which is expected to be closed by the end of the year, will make Nissan the single largest shareholder in Mitsubishi Motors and give it the power to nominate a third of Mitsubishi's board. A Nissan executive is expected to be at the helm.

Earlier this year, Mitsubishi admitted to rigging the fuel economy tests of some small cars, mainly sold in Japan under the Mitsubishi and Nissan brands. The company's value fell drastically since the scandal was reported. With the news of the deal with Nissan, the company's shares surged 16%.

Nissan and Mitsubishi already have an existing alliance since 2011 under which they cooperate and develop vehicles jointly. The new deal will give Nissan a foothold in Japan's small car market, which is dominated by Suzuki and Daihatsu. It will also gain in Southeast Asian markets, where Mitsubishi has a larger presence.

Source: Reuters