Nissan will be purchasing a 34 percent stake in Mitsubishi at a cost of around 1.5 billion euros. This move has been given the green signal by the European Commission.
The European Commission approved the move earlier this week, stating that, "The European Commission has approved under the EU Merger Regulation the acquisition of Mitsubishi Motors Corporation by Nissan Motor, both of Japan."
After the fuel economy scandal of Mitsubishi, this deal will make Nissan as one of the firm's largest single shareholder.
Carlos Ghosn, Chairman and CEO of Nissan said, "We will support Mitsubishi Motors as they address their challenges and welcome them as the newest member of our enlarged alliance family."
He added, "This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors. It creates a dynamic new force in the automotive industry that will cooperate intensively, and generate sizeable synergies."
Both the companies have already collaborated on several models in the past and will sign the share agreement within two weeks.
Mitsubishi Motors Chief Executive, Osamu Masuko said, "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."
Earlier Mitsubishi admitted that it has given false fuel economy data on up to 13 different models manufactured since 1991. The cars affected by this scandal are only sold in Japan.
The cars sold in the UK or any other market are not affected by this latest fuel economy scandal. Mitsubishi has issued a letter to its owners, stating their vehicle is not embroiled in this scandal.