Reeling from a fuel-efficiency testing scandal, Japan's Mitsubishi Motors (MMTOF)   has lined up a ¥237.4 billion ($2.18 billion) rescue funding infusion from peer Nissan Motor.   (NSANY)

Nissan said it had struck an outline agreement to pay ¥468.52 per share for a 34% stake in Mitsubishi Motors, which has admitted to irregular fuel-efficiency testing dating back a quarter of a century. A stake of that size means Nissan would eclipse Mitsubishi Motor's 20% owner, Mitsubishi Heavy Industries Ltd., as the carmaker's leading shareholder.

Nissan said it will conduct due diligence on its target between now and August and anticipates closing the deal in October.  It said the capital injection will form the basis of a wider strategic alliance, including the sharing of management functions, R&D and manufacturing facilities, and joint buying.

Mitsubishi Motors had lost 25% of its market value since before divulging the flawed fuel-efficiency tests on April 20 and Wednesday's close.

On Thursday the shares were most recently up ¥80, or more than 16%, at ¥575. At that price the equity is worth ¥565.6 billion.

Shares in Nissan, which has a global alliance with French car maker Renault, slipped 1.4%. The company has a market value of about ¥4.44 trillion.

Earlier on Thursday Nissan reported full-year results including a 14.5% increase in net profit to ¥523.8 billion and a 7.2% rise in revenue to ¥12.2 trillion.