Nissan and Mitsubishi Motors forge strategic alliance Nissan and Mitsubishi Motors have sealed a basic agreement for a potential strategic alliance in the near future. Following an unofficial share issue, Nissan will take a 34 percent equity stake in MMitsubishi Motors for a disclosed 237 billion yen.

The strategic alliance will extend an existing partnership between Nissan and Mitsubishi, under which the two companies have jointly collaborated for the past five years. Nissan and Mitsubishi have agreed to cooperate in areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilization and growth markets.

Carlos Ghosn, Chief Executive and President of Nissan, said, “This is a breakthrough transaction and a win-win for both companies. It creates a dynamic new force in the automotive industry that will cooperate intensively, and generate sizeable synergies. We will be the largest shareholder of Mitsubishi, respecting their brand, their history and boosting their growth prospects. We will support Mitsubishi as they address their challenges and welcome them as the newest member of our enlarged Alliance family.”

Osamu Masuko, Chairman and Chief Executive of Mitsubishi Motors, added, “Through its long history of successful partnerships Nissan has developed a deep knowledge of maximizing the benefits from alliance partnerships. This agreement will create long-term value needed for our two companies to progress towards the future. We will achieve long term value through deepening our strategic #partnership including sharing resources such as development, as well as joint procurement.”

Under the terms of the transaction, Nissan will purchase 506.6 million newly issued Mitusbishi shares at a price of 468.52 yen per share. The price per share reflects the volume weighted average price over the period between 21 April and including 11 May. Nissan will become the largest shareholder of Mitsubishi Motors on closing.

Mitsubishi Motors and Nissan expect Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo – Mitsubishi UFJ to maintain a significant collective ownership stake in Mitsubishi Motors, and to support the strategic alliance. The transaction is subject to the signing of a definitive Alliance Agreement, expected by the end of May, and the signing of a shareholders agreement with the current shareholders of Mitsubishi Motors and regulatory approvals, prior to the end of the year. Mitsubishi Motors will now propose Nissan nominees as board directors in proportion to Nissan’s voting rights, including a Nissan nominee to become Chairman of the Board.

The decision by Nissan to acquire a strategic stake in Mitsubishi Motors marks the latest expansion of its Alliance model, built around a 17-year cross shareholding arrangement with Renault. Nissan has also acquired stakes or signed partnerships with other automotive groups, including Daimler and AvtoVaz.