YOKOHAMA/NAGOYA, Japan (Dec. 16, 2011)-Nissan Motor Co., Ltd. and Aichi Machine Industry Co., Ltd. today announced that both companies have agreed to a share exchange transaction by which Aichi Machine Industry will become a wholly-owned subsidiary of Nissan. This was approved at meetings of both companies' board of directors held today. The share exchange is expected to take effect on March 22, 2012.
1. Background: A step toward achieving the objectives of Nissan Power 88
Nissan recently announced a wide-ranging, six-year business plan, called “Nissan Power 88", which is aimed at accelerating the company's growth across new markets and segments. This mid-term plan emphasizes geographical growth as well as sustainable mobility and mobility for all, encompassing zero-emission vehicles and low-emission technologies.
The decision to make Aichi Machinery a fully consolidated company in the Nissan group will greatly contribute to the strategic direction laid out in Nissan Power 88, such as enhancing quality, acceleration of growth through business expansion, and reducing costs. Amid intensifying market competition, the Nissan group faces accelerating demand for the development of high-performance, high-quality and cost-competitive powertrain components that meet more stringent CO2 regulations. In terms of manufacturing, the company continues to swiftly adapt to the needs of global markets, such as by localizing production to expand global businesses, especially in emerging countries. Both Nissan and Aichi Machinery are committed to joining forces within the Nissan group to expand business in emerging markets such as China, India, Russia, Brazil and Indonesia.
Through this share exchange to become a wholly-owned Nissan subsidiary, it is expected that actions to optimize the roles and responsibilities and resource allocation between Nissan and Aichi Machinery will be accelerated. This transaction is a significant milestone toward the achievement of Nissan Power 88 and the growth of Nissan group companies.
Aichi Machinery Industry was established in 1949 and formed a technical tie-up agreement with Nissan in 1962. This was followed by a business tie-up in 1965, after which the company was introduced as a Nissan consolidated affiliate in 2000. Today, it serves as the mother plant for strategic small displacement gasoline engines in the Renault-Nissan Alliance, as well as the design and production base in Japan for these engines. In addition, it is the production base for Nissan's manual transmissions in Japan, as well as being the only design and engineering base for manual transmissions in the Nissan group.
Aichi Machinery also plays a key role as the manufacturing base for the cutting edge technology in components such as the high-performance dual clutch system used in Nissan's flagship supercar, the Nissan GT-R. Its manufacturing prowess is also exemplified in the production of a reducer, an important component in used in the 100% electric Nissan LEAF, which leverages its long history in gear processing expertise.
The automotive sector's business environment remains challenging; coupled with a turbulent global economy and prolonged unfavorable currency exchange rates, competition is growing among manufacturers of electric vehicles and fuel cell electric vehicles. In the area of gasoline engines, continuous progress in the technology has led to dramatic improvements in its environmental performance.
Amid this tough operating environment, Aichi Machinery Industry is set to play a key role together with Nissan's Yokohama and Iwaki plants to strengthen overall competitiveness by reinforcing global expansion activities. This is in addition to enhancing business in Japan and participating in engine development to swiftly reflect the needs of customers around the world.
Going forward, the share exchange between Nissan and Aichi Machinery will strengthen ties between both companies within the Nissan group, and elevate the capability to take on new challenges and implement quicker actions to raise the global competitiveness of both companies.
2. Outline of the Share Exchange
(1) Timeline
Board of Directors Meetings to Approve the Share Exchange (Both companies) | Friday, December 16, 2011 |
Execution of the Share Exchange Agreement (Both companies) | Friday, December 16, 2011 |
Public notice of the Record Date of the Extraordinary General Meeting of Shareholders (Aichi Machine Industry) | Saturday, December 17, 2011 (Expected) |
Record Date of the Extraordinary General Meeting of Shareholders (Aichi Machine Industry) | Sunday, January 1, 2012 (Expected) |
Extraordinary General Meeting of Shareholders about the Share Exchange (Aichi Machine Industry) | Mid-February, 2012 (Expected) |
The Last Trading Day (Aichi Machine Industry) | Thursday, March 15, 2012 (Expected) |
Delisting (Aichi Machine Industry) | Friday, March 16, 2012 (Expected) |
Scheduled date of the Share Exchange (Effective Date) | Thursday, March 22, 2012 (Expected) |
- (Note 1) Nissan will implement the Share Exchange by means of a "simple share exchange" under Article 796, Paragraph 3 of the Companies Act which does not require approval by shareholders at its general shareholders' meeting.
- (Note 2) The scheduled date of the Share Exchange is subject to change by mutual agreement between Nissan and Aichi Machine Industry.
(2) Method of the Share Exchange
Through the Share Exchange, Aichi Machine Industry will become a wholly-owned subsidiary of Nissan and Nissan will become the parent company owning all of the shares in Aichi Machine Industry. Nissan will implement the Share Exchange by means of a “simple share exchange."
Company | Nissan (100% Parent Company) |
Aichi Machine Industry (Wholly-owned Subsidiary) |
---|---|---|
Share Exchange Ratio | 1 | 0.4 |
Number of Shares to be delivered in the Share Exchange | Common Stock : 21,184,488 shares (Plan) |
100% Parent Company | Wholly-owned Subsidiary | |
---|---|---|
Name | Nissan Motor Co., Ltd. | Aichi Machine Industry Co., Ltd. |
Head office address | 2, Takara-cho, Kanagawa Ward, Yokohama City, Kanagawa Prefecture, Japan | 2-12 Kawanami-cho, Atsuta-ku, Nagoya City, Aichi Prefecture, Japan |
Representative | Carlos Ghosn, President | Toshihiro Sakai, President |
Business | Development, manufacturing and sale of automobiles and others | Development, manufacturing and sale of engines, manual transmissions and others |
Share capital | 605,814 million yen | 8,518 million yen |
Date established | December 26, 1933 | May 23, 1949 |
Number of shares issued | 4,520,715,112 shares | 90,655,636 shares |
Fiscal year end | March 31 | March 31 |
Number of employees | 155,099 (Consolidated) | 2,247 (Consolidated) |
Relationship between the parties | Nissan owns 41.43% of issued shares of Aichi Machine Industry and is its parent company. (As of November 30, 2011) |
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