Nissan Motor Co. Ltd. and Mitsubishi Motors Corporation have signed an agreement to form a strategic alliance which saw the former buying 34% of the latter’s shares for 237 billion yen (around P 100.9 billion).
The 2 automotive companies have agreed to work together on key areas such as purchasing, vehicle platform sharing, tech, collaborative plant utilization, and growth markets. This move also extended their existing partnership that was inked 5 years ago.
“This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors. It creates a dynamic new force in the automotive industry that will cooperate intensively. We will be the largest shareholder of MMC, respecting their brand, their history, and boosting their growth prospects,” said Nissan Motor Co. Ltd. Chief Executive and President Carlos Ghosn.
In line with this, Nissan will purchase 506.6 million newly-issued Mitsubishi shares, reflecting the volume-weighted average price from April 21 to May 11, 2016. Each share purchased will cost 468.52 yen, and will be subjected to an agreement-signing by Nissan’s Alliance group and other MMC shareholders like Mitsubishi Heavy Industries, Mitsubishi Corporation, and the Bank of Tokyo-Mitsubishi UFJ. By the end of the year, Nissan will have successfully closed the deal, making it the biggest shareholder of MMC.
Nissan’s huge acquisition of MMC will strengthen its Alliance group, which it created 17 years ago along with French carmaker Renault. To date, Nissan has also acquired stakes or signed partnerships with other automotive groups like Daimler and AutoVaz.