Nissan has agreed to make a US$2.29 billion investment to acquire 34% of Mitsubishi Motors, making it the single largest shareholder of the company, while providing Mitsubishi with enough of a stake to wield control under Japanese shareholding rules.

The decision was first announced in May 2016, and now Mitsubishi has officially become part of the Renault-Nissan Alliance. The deal offers Mitsubishi a change to make a turnaround after it admitted to overstating the fuel mileage on some of its cars, while Nissan aims to capitalise on Mitsubishi’s strong presence in developing Asian countries to lift its lagging market share.

Renault acquired a controlling stake in Nissan back in 1999, when Nissan’s performance was rather weak. Part of the Alliance’s future plan involves cutting costs by reducing redundancy and grouping together resources to save up to US$230 million in 2017, with a further US$577 million the following year.

Sources: Reuters/CNET