Kyodo News reported that JFE Holdings Inc and IHI Corp have reached a basic agreement to merge their shipbuilding units in October, creating a shipbuilder comparable with industry leader Imabari Shipbuilding Co in terms of production volume.

The deal to merge Universal Shipbuilding Corp. and IHI Marine United Inc is announced at a time when competition from Chinese and South Korean shipbuilders is intensifying.

The merged company will take over all of the shipyards and offices of the two companies along with their employees.

The company will be owned 45.93% each by JFE Holdings and IHI and 8.15% by Hitachi Zosen Corp.

Universal Shipbuilding President Mr Shinjiro Mishima will serve as president and Marine United President Mr Shigemi Kurahara will be chairman.

JFE Holdings and IHI said they will seek to conclude a final agreement on the merger by the end of August.

In April 2008, JFE Holdings and IHI unveiled a plan to merge their shipbuilding units, but negotiations dragged as the shipbuilding market deteriorated following the collapse of Lehman Brothers Holdings Inc. that autumn.

(Sourced from japantimes.co.jp)