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Nissan buys $2.2 billion controlling stake in Mitsubishi

Staff writer |
Nissan Motor has agreed to buy a 34 percent stake in Mitsubishi Motors, taking de facto control with a $2.2 billion bet that bails out its smaller rival.

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Mitsubishi Motors is in its third scandal in two decades and has had $3 billion wiped off its market value after confessing to manipulating fuel economy data.

Mitsubishi and Nissan already cooperate on development and manufacturing with a partnership dating back to 2011, but that deal does not currently involve any cross-shareholding.

Under Thursday's deal, Mitsubishi Motors will issue new shares to Nissan at a 5.3 percent discount to Wednesday's close, raising 237.4 billion yen ($2.18 billion).

That will hand Nissan just over a third of the group - enough to wield control, under Japanese shareholding rules.

Nissan CEO Carlos Ghosn said the two would now share and jointly develop technology, and could realize "billions" in synergies by coordinating purchasing, plant utilization and cooperating in growth markets.

"We are determined to preserve and nurture the Mitsubishi Motors brand. We will help this company address the challenges it faces, particularly in restoring consumer trust in its fuel economy performance," Ghosn said, addressing a joint press conference in Yokohama, south of Tokyo.

Nissan will be able to nominate a third of Mitsubishi Motors' board, which Ghosn said he believed would be led by a Nissan executive - prompting industry analysts and bankers to forecast a significant reshuffle at the top.

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