Nissan says ready to buy one-third stake in Mitsubishi for $2.2 bn

PanARMENIAN.Net - Nissan threw a lifeline to Mitsubishi Motors Thursday, May 12, saying it would buy a one-third stake in the scandal-hit automaker for $2.2 billion, forging an alliance that will challenge some of the world's biggest auto groups, AFP reports.

The news comes after Mitsubishi was plunged into crisis following bombshell revelations that it has been cheating on fuel-economy tests for years, sparking questions about the company's future.

Under the deal, Nissan will become the automaker's top shareholder, vaulting past Mitsubishi Heavy Industries, which owns about 20 percent of the Outlander sport utility vehicle maker, AFP says.

Nissan and French automaker Renault own share stakes in each other and their sales lumped together with the smaller Mitsubishi would top 9.5 million units annually.

"This transaction represents a potential win-win for both of our companies and promises growth opportunities," Nissan CEO Carlos Ghosn told a news briefing.

"We are determined to preserve and nurture the (Mitsubishi) brand. We will help this company to address the challenges it faces, particularly in restoring consumer trust."

Mitsubishi's shares skyrocketed more than 16 percent to 575 yen in Tokyo. The embattled firm's stock had plunged about 40 percent since the scandal broke last month.

The deal, which was announced Thursday, will see Nissan buy about 506 million Mitsubishi shares at 468.52 yen apiece, with the deal valued at 237.36 billion yen ($2.2 billion), according to a regulatory filing.

Nissan will also be allowed to appoint some members to Mitsubishi's board.