Nissan Motor Company has agreed to buy a 34% stake in Mitsubishi Motors Corporation, a majority stake which essentially means they will be taking control of the company. The deal is seen as somewhat of a bailout for the scandal-ridden Mitsubishi, which recently lost an estimated $3 billion of its market value after confessing to manipulating fuel economy data.
On the positive side for Nissan, it should allow them to make important entries into the Southeast Asian markets of Thailand and the Philippines, where Mitsubishi’s models are most popular. Although Mitsubishi and Nissan already cooperate on development and manufacturing with a partnership dating back to 2011, that deal did not involve any cross-shareholding. Under Thursday’s deal, Mitsubishi Motors will issue new shares to Nissan worth approximately $2.18 billion.
Under Japanese shareholding rules, 34% is all that is required to be granted control of a company.
