Nissan Mitsubishi

Mitsubishi Motors Corporation (MMC) has announced that a Strategic Alliance Agreement with Nissan has been approved by its board of directors. This follows on discussions and negotiations with Nissan after the signing of the basic agreement on May 12 for Nissan to take a 34% equity stake in MMC for 237 billion yen (RM8.37 billion).

The signing of a definitive Strategic Alliance Agreement is the next step in the transaction, which will also involve the signing of a shareholders agreement with the current Mitsubishi Group shareholders of MMC as well as the usual regulatory approvals.

Yesterday, MMC also announced a new executive line-up, which contains five new appointments. Eight members were listed as retiring, including former president Tetsuro Aikawa, who reportedly resigned in the wake of the company’s fuel economy data scandal. Last week, CEO Osamu Masuko was named as the president.

nissan carlos ghosn

On May 12, it was reported that Nissan was to purchase 506.6 million newly-issued MMC shares at a price of 468.52 yen per share, and the deal will see Nissan effectively becoming the largest shareholder of MMC once it is completed. Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo-Mitsubishi UFJ will continue to maintain a significant collective ownership stake in MMC.

Nissan has said that its deal in acquiring an equity stake in MMC in the wake of the latter’s crisis will provide it added manufacturing scale and result in cheaper vehicle development costs. Nissan president Carlos Ghosn said that the deal will result in big savings from a vehicle development point of view, with aspects of design, engineering and production being shared between the two automakers.

It will also provide Nissan with a quicker inroad into the development of plug-in electric vehicles, an area Mitsubishi is already involved in.