Nissan completes Sh232 billion takeover of Mitsubishi, retains embattled CEO
Nissan Motor Co Ltd yesterday said it had completed a deal to take a controlling stake in Mitsubishi Motors Corp. It indicated it will retain the embattled automaker’s chief executive to ensure its recovery from a mileage cheating scandal.
Japan’s number two automaker has agreed to make a 237 billion yen ($2.29 billion or about Sh231.99 billion) investment to acquire a 34 per cent stake in Mitsubishi Motors, making it the single largest shareholder in its smaller peer. The deal will make Mitsubishi Motors a member of an alliance between Nissan and French automaker Renault.The two companies said the partnership will generate significant synergies in purchasing and plant utilisation.
The firms said they will jointly develop automated driving technologies and plug-in hybrid vehicles. Pending shareholder approval, Carlos Ghosn, who serves as chairman and CEO of Nissan and Renault, will lead the board of Mitsubishi Motors. Osamu Masuko will remain the company’s president and CEO despite calls by some shareholders for him to resign to take responsibility for falsifying the mileage on its vehicles.
Ghosn said keeping Masuko on was an “important condition” in proceeding with the partnership, adding that all management decisions will be made by Masuko. “One of the reasons that I so much wanted Mr Masuko to stay as CEO was because I wanted the people at Mitsubishi to know that Mitsubishi will remain Mitsubishi. Mitsubishi will not become a subsidiary of Nissan,” he told a joint briefing. “This sends a strong message that it’s not Nissan that’s going to transform Mitsubishi, it’s Mitsubishi that’s going to transform Mitsubishi.”
Pooling resources and eliminating duplicate operations will result in estimated annual cost savings of 25 billion yen for Mitsubishi.