Mitsubishis finance group will take over Mercedes financial services group from its parent, the Japanese carmaker said in a statement.
The move, which could help boost the Japanese automaker’s cash position in the wake of a sharp fall in car sales, comes amid a downturn in global demand and concerns about its safety record.
The takeover is subject to regulatory approval in Japan, the United States and Singapore.
The deal comes as the world’s biggest carmaker, the world and fourth-biggest automaker, is struggling to keep up with rising demand for new vehicles and as global carmakers seek to fend off competitors like Volkswagen.
A key reason for the slowdown has been a falling value of the yen, which has hit Japanese firms’ earnings.
The country’s central bank last month lowered its benchmark interest rate to a record low of 0.75% for the first time in six years.
That has put pressure on Japanese firms to raise their dividend payments, which have fallen from 2.5% a year ago to 1.5%.
The latest move by Mitsubushi Finance, which is backed by Mitsui and Mitsubisha, will help keep the company’s cash flow up for at least another year.
It will also allow Mitsubashis board to approve its decision to take over the group, the company said.
“Mitsubishi Finance Group is an innovative and well-run finance group and the combination of our combined expertise and business experience will provide us with the strategic and strategic synergies to ensure that we achieve the highest possible return for our shareholders,” the company wrote.
Mitsumashis finance will take control of Mitsubis automotive and financial services business, the group said.
It will become Mitsubisan Finance Group, which will be led by its managing director, Mitsuyoshi Mitsuo.
It said the new group will continue to be based in Tokyo.
Mitsuo will be chairman, and Mitsuzuki will be chief executive officer.
Mizu will become the group’s chief financial officer and will also become chief financial adviser to Mitsubischan.
The combined group will have access to Mitsubaishi’s finance technology, the statement said.
Mikuoka will be the group president.
Mitsubaishi Finance, a unit of Mitsui, has been operating in Japan since 1999.
Its current assets are $6.2 billion, according to the group.