Nissan has completed its acquisition of a 34 percent equity stake in Mitsubishi Motors to become Mitsubishi’s largest stakeholders.The acquisition also see Mitsubishi become part of the global Alliance with Nissan and Renault. With the addition of Mitsubishi, 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.

Nissan Chairman and Chief Executive Officer Carlos Ghosn announced that Nissan and Mitsubishi would collaborate on joint purchasing, deeper localization, joint plant utilization, common vehicle platforms, technology-sharing and an expansion of the companies’ combined presence in both developed and emerging markets.

“The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making,” said Ghosn. “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.”

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Ghosn predicted that through its partnership with Mitsubishi, 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 4 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.

Nissan offered its assistance at the request of Osamu Masuko, president and chief executive officer of Mitsubishi, following the company’s fuel economy crisis. The two companies have cooperated on kei-cars for the Japanese market over the past five years.

As part of this strategy, Nissan has nominated four representatives to the Board of Mitsubishi, including Ghosn as chairman-elect. The other nominees are Hitoshi Kawaguchi, chief sustainability officer and head of global external affairs; Hiroshi Karube, global controller and global asset manager; and Mitsuhiko Yamashita, Nissan’s current representative on the Mitsubishi board.

Ghosn has announced a number of other management changes, effective 1 November, to allow him to continue to focus on maintaining Nissan’s momentum in delivering performance, while at the same time supporting Masuko at Mitsubishi. Ghosn has proposed to the Nissan Board, which has approved, the appointment of Hiroto Saikawa, currently chief competitive officer, as co-chief executive officer.

In addition, Veronique Sarlat-Depotte, currently deputy to Yamauchi will assume the responsibility as Alliance executive vice president of purchasing and head of the Renault Nissan Purchasing Organization. She will be supported by Makoto Uchida who will take responsibility for purchasing at Nissan. Also at the request of Masuko, the management team of Mitsubishi will be further strengthened by current Nissan Chief Performance Officer Trevor Mann, who will become chief operating officer of Mitsubishi. Mann will be replaced as chief performance officer by Jose Munoz who will continue as chairman of Nissan’s North American region.

Edited: Nissan