TOKYO -- Nissan Motor Co. will pay 40.46 billion yen ($393 million) to raise its stake in car parts maker Calsonic Kansei Corp. to 41.7 percent from 27.6 percent, Japan's second-biggest auto maker said on Tuesday.
Nissan, held 44 percent by France's Renault SA, will buy all of the 52 million new shares to be issued by Calsonic Kansei for 778 yen each, making the company a consolidated unit effective Jan. 11.
The move is in line with Nissan's strategy of taking a controlling stake -- or at least one-third -- of important business partners to gain management control of those companies.
"This allows Calsonic Kansei to expand in line with our growth strategy," a Nissan spokeswoman said. "We can expect Calsonic Kansei to be a more profitable company and contribute to our earnings."
Calsonic Kansei, meanwhile, said Nissan's bigger capital participation would help it meet a growing need for investment spending to stay competitive, while strengthening the two companies' partnership.
Under a new three-year business plan, the Tokyo-based parts maker said it would establish new engineering bases in Europe and China, and manufacturing and tooling bases in China and Thailand to meet demand in those markets.
It plans to invest 130 billion yen in equipment and facilities and 90 billion yen for research and development over the three-year period, it said.
In the business year ending in March 2008, Calsonic Kansei said it would aim for net sales of 700 billion yen and an operating profit margin of at least 5 percent. In the year ended March 31, it had sales of 619.2 billion yen and an operating profit of 20.61 billion yen, for a profit margin of 3.3 percent.
Nissan said payment for the new Calsonic shares would come from its cash flow and therefore have little impact on its profits for this year.