Nissan has entered an agreement to acquire a controlling stake in fellow Japanese automaker Mitsubishi.

Under the agreement, which is still subject to shareholder approval, Nissan will pay ¥237 billion (approximately $2.17 billion) for 34 percent of Mitsubishi.

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This will make Nissan the single largest shareholder at Mitsubishi. It means a Nissan nominee will become chairman of Mitsubishi, and Nissan will also get representation on Mitsubishi’s board proportional to its stake. Other key shareholders include Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo.

Faced with an aging lineup and its own emissions cheating scandal, the outlook for Mitsubishi is dim. Nissan hopes to turn things around by sharing resources. Nissan and Mitsubishi have already worked closely for the past five years. For example, the two have already cooperated in areas such as purchasing, plant utilization and platform development. And Nissan, through its existing relationships with Renault, Daimler and Russia’s AvtoVaz, has plenty of experience deriving synergies from partnerships.

“This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors,” Nissan CEO Carlos Ghosn said in a statement. “It creates a dynamic new force in the automotive industry that will cooperate intensively and generate sizeable synergies."


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