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Nissan to take 34% stake in Mitsubishi Motors | Nissan to take 34% stake in Mitsubishi Motors |
(about 1 hour later) | |
Japanese carmaker Nissan will take a 34% stake in rival Mitsubishi Motors, in the wake of the latter's recent scandal over fuel efficiency. | |
The all-share deal is valued at 237bn yen ($2.2bn; £1.52bn). | |
Carlos Ghosn, chief executive of Nissan, has called the deal "a breakthrough transaction and a win-win" for both companies. | |
The tie-up is subject to regulatory approval as well as the backing of Mitsubishi shareholders. | |
If it is approved, the deal is expected to close by the end of the year and make Nissan the largest shareholder in Mitsubishi Motors. | |
The strategic alliance will extend an existing partnership between the two companies forged over the past five years. | |
Both will co-operate in areas including purchasing, technology and sharing platforms. | |
Mr Ghosn said: "We will support Mitsubishi Motors as they address their challenges and welcome them as the newest member of our enlarged alliance family." | |
Nissan's Alliance family is built around a 17-year cross shareholding agreement with French carmaker Renault. Nissan has also previously acquired stakes or signed partnerships with other carmakers including Daimler. | |
Osamu Masuko, chief executive at Mitsubishi Motors, said he hoped the deal with Nissan would restore confidence in the company: "It is not an easy task to regain trust, so through the alliance with Nissan, we will be starting a path towards tackling this difficult task." | |
Profits rise | |
The tie-up was announced as Nissan reported a 14.5% rise in net profit to 523.8bn yen ($4.4bn; £4bn) for the 12 months to March. | |
The Japanese firm said rising demand in North America and China helped to offset unfavourable currency movements and weakness in emerging markets. | |
For the financial year to March 2017, Nissan is estimating flat profit growth and an 11% fall in operating profit due to the strengthening yen. | |
Mr Ghosn said: "Encouraging demand for new models, combined with continued cost efficiency, helped us withstand currency headwinds and volatile trading conditions in several emerging markets." | |
Nissan said recently launched models including the Maxima, Altima and Titan pick-up trucks were expected to contribute to global sales growth in the coming year. | |
Globally, Nissan sold 5.42 million vehicles in the 12 months to March - up 2% from the previous year. | |
Yen effect | |
Earlier this week Nissan's rival Toyota announced a record profit of 2.31tn yen. But the world's biggest-selling motor company then warned of a 35% fall in net profit for the year to March 2017 on the recent rise in the yen. | |
Last year, $1 would buy 120 yen, but over the next year that is expected to fall to just 105 yen. | |
A weaker yen makes goods manufactured by Japanese exporters less expensive overseas. |