Reports of Nissan considering purchase of Mitsubishi shares came in earlier today. In a swift turn of events, it has been confirmed that Nissan has indeed bought shares from Mitsubishi, taking a 34% stake of the automaker valued at $2.2 billion.

Nissan will effectively become the single largest shareholder of Mitsubishi Motors. At a joint press conference, Carlos Ghosn, chief executive of Nissan and Renault, had this to say. "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. We will be the largest shareholder of MMC, respecting their brand, their history and boosting their growth prospects. We will support MMC as they address their challenges and welcome them as the newest member of our enlarged Alliance family."

The alliance sees Nissan and Mitsubishi Motors cooperating in areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilization and growth markets.

Mitsubishi was recently rocked by a scandal which involved the overstatement of their home market vehicles emissions and fuel economy. It was Nissan employees who took note of the fuel economy discrepancy when the brand's engineers tested the Nissan Dayz, which is a rebadged version of Mitsubishi's eK wagon.

In addition, Mitsubishi issued a public apology that the company has been overstating fuel economy figures since 1991 at the break of the scandal. At the time of writing, nine Japanese Domestic Market models have been affected since the announcement. Mitsubishi adds that no overseas models have been affected.

"It will not be easy to restore trust. With Nissan, we will start moving towards that goal," said Osamu Masuko, chief executive of Mitsubishi Motors. Masuko adds, "Through its long history of successful partnerships Nissan Motor has developed a deep knowledge of maximizing the benefits from alliance partnerships. This agreement will create long term value needed for our two companies to progress towards the future. We will achieve long term value through deepening our strategic partnership including sharing resources such as development, as well as joint procurement."

The transaction is subject to the signing of a definitive Alliance Agreement, expected by the end of May, 2016, the signing of a shareholders agreement with the current Mitsubishi Group shareholders of MMC and regulatory approvals. In addition, MMC will propose Nissan nominees as board directors in proportion to Nissan’s voting rights, including a Nissan nominee to become Chairman of the Board.

The deal is expected to be completed by the end of the year.