It’s Official: Nissan Buys Mitsubishi for $2.3 Billion
It’s official: Nissan has just finalized a 237 billion yen ($2.29 billion) investment to acquire 34% of Mitsubishi Motors, making it the largest shareholder in the company and giving it a controlling stake as per Japanese shareholding rules.
We’ve known for a while that it was going to happen but the deal still needed to be approved by government authorities before it could be formally sealed. As announced yesterday, Carlos Ghosn will replace Osamu Masuko as chairman of the board while the latter stays on as president of Mitsubishi. According to Masuko, he had wanted to resign to take responsibility of the fuel economy scandal but stayed at Ghosn’s request “for the good of the company.”
“One of the reasons that I so much wanted Mr. Masuko to stay as CEO was because I wanted the people at Mitsubishi to know that Mitsubishi will remain Mitsubishi. Mitsubishi will not become a subsidiary of Nissan,” Ghosn explained in a joint briefing. “This sends a strong message that it’s not Nissan that’s going to transform Mitsubishi, it’s Mitsubishi that’s going to transform Mitsubishi.”
Ghosn is well-regarded in the automotive industry for rescuing Renault in the 1990s and then Nissan in the early 2000s, which has earned him the nickname “Le Cost Killer.” He is confident he can also turn Mitsubishi around and stated that “we are going to show that Mitsubishi Motors has more potential than has been shown so far.”
The Renault-Nissan alliance that Mitsubishi is joining is already the most successful partnership between two major automotive manufacturers, which allows them to operate at the scale of much larger companies. With the addition of Mitsubishi, the alliance now sells around 10 million cars per year, making it the fourth-largest automotive group behind Volkswagen, Toyota, and General Motors.
Nissan and Mitsubishi will jointly develop automated driving technologies and plug-in hybrid vehicles as well as “develop synergy” in areas of purchasing, plant utilization, and more.
Ghosn has previously teased a major deal between Renault-Nissan and Mitsubishi that would be announced as soon as the acquisition was finalized (“The day we announce the deal, we’re going to tell you exactly what we’re going to do together. And it’s massive.”)
That massive deal has yet to be announced—stay tuned for when it does!
News Source: The Wall Street Journal