Japan’s two largest shipbuilders are to join forces in a bid to catch up with similar consolidation moves in China, South Korea and Europe.
In a statement, Japan Marine United (JMU) said it is planning to issue new shares which will be acquired by Imabari Shipbuilding. The volume of new shares is still under discussion.
The share issue will mark the starting point of a comprehensive business cooperation between the two companies.
Ongoing talks between Imabari and JMU executives involve the establishment of a new joint shipbuilding and design company collaborating in all sectors of the commercial shipbuilding market except LNG.
The pair also plan to combine their shipbuilding capacity to maximise efficiency.
JMU and Imabari hope to complete discussions by the end of this year and begin the new collaboration after winning approval from domestic and non Japanese competition authorities.
Mega mergers
The move comes following the recent similar merger of Chinese mega yards China State Shipbuilding Corporation (CSSC) and China Shipbuilding Industry Corporation (CSIC).
There are also pending mergers in South Korea between Hyundai Heavy Industries and DSME, and in Europe Italy’s Fincantieri is gearing up for a combination with France’s Chantiers de l’Atlantique.
Imabari is Japan’s largest shipbuilder with a annual production capacity of 4.5m gt. JMU ranks as Japan’s number two with an annual capacity 2.37m gt.
Both yards are involved in all the mainstream commercial shipbuilding sectors, although they differ in their approach to LNG construction specialising in different designs.
However, the move has surprised many in Japan as the pair have different ownership structures and appear to be an unlikely match.
Imabari is a traditional Japanese private shipbuilding company controlled by the Higaki family. JMU has been formed over the last 20 years through a long line of consolidation between stocklisted shipbuilding companies.
Its main shareholders are currently the Tokyo-quoted companies JFE Holdings and IHI Corp, which both hold a 45.93% stake.
