Thursday, May 12, 2016
By Kriti Gupta
Nissan becomes major shareholder in Mitsubishi Motors
Japanese car maker Nissan Motors has said that it will buy 34% shares of Mitsubishi Motor Corp by paying ¥237.4 billion ($2.18 billion) to its Japanese sibling Mitsubishi. The recent scandal of falsified fuel-economy data has greatly influenced the recognition of Mitsubishi Motors. After purchasing 34% stake in company Nissan will emerge as the major controlling shareholder of company. The deal is scheduled for finalization on May 25, 2016. The new treaty between Japanese auto giants is expected to give new directions of Japanese car market.
Carlos Ghosn, right, chairman and CEO of the Renault-Nissan Alliance, and Mitsubishi Motors Chairman and CEO Osamu Masuko
Once the deal is done the control of companies owned by Mitsubishi comprising Mitsubishi Heavy Industries Ltd will be jointly headed by both Nissan and Mitsubishi. Similarly Nissan will also participate in the board of directors constituted by Mitsubishi Motors Ltd in proportion to its shares and the chairman of group will also be nominated by Nissan Motors.
In the words of Mr. Carlos Ghosn, CEO, Nissan Motors, “Nissan is determined to preserve and nurture the Mitsubishi Motors brand. We will help this company address the challenges it faces, particularly restoring consumer trust in the fuel-economy performance.”
As it is known that Mitsubishi is suffering from the problem of decline in sales and increasing cost of production at one side on the other side it admitted that it revealed false data related with fuel economy performance of its four models that were sold in Japan of which two were sold by name of Nissan Motors.