Tokyo, Oct 20 : Automobile major Nissan Motor on Thursday said it has completed the acquisition of a 34 per cent equity stake in Mitsubishi Motors to become its largest shareholder.
“The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making,” Carlos Ghosn, Nissan Chairman and Chief Executive Officer, was quoted as saying in a statement.
“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.”
According to the statement, MMC will become a part of the global “Alliance” with Nissan and Renault.
The “Alliance” will be in the world’s top three automotive groups by global volumes, with sales of 10 million units in fiscal year 2016.
Ghosn elaborated that Nissan and Mitsubishi Motors would collaborate on joint purchasing, deeper localisation, joint plant utilisation, common vehicle platforms, technology-sharing and an expansion of the companies’ combined presence in both developed and emerging markets.
He predicted that through its partnership with Mitsubishi Motors, Nissan would target synergy benefits worth 24 billion yen in fiscal year 2017, rising to 60 billion yen in fiscal year 2018 and beyond.
The gains will contribute to increased earnings per share worth an estimated four yen per share in fiscal year 2017 and 10 yen per share in fiscal year 2018 — on top of any earnings accretion linked to Nissan’s overall shareholding in Mitsubishi Motors.
Nissan offered its assistance at the request of Osamu Masuko, President and Chief Executive Officer of Mitsubishi Motors, following the company’s fuel economy crisis.
The two companies have cooperated on kei-cars for the Japanese market over the past five years.