Nisshin Steel Co and Nippon Metal Industry Co separately denied Thursday that they have agreed to merge their operations.

The two companies made the remarks after Japan Metal Bulletin reported that they are merging to compete with global rivals.

Japan Metal Bulletin reported that the companies may make announcement on a merger soon.

Shares of Nisshin Steel rose by 5.2% to JPY 162 as of the 11 AM trading break on the Tokyo Stock Exchange, the biggest gain since May 31st 2011. Nippon Metal Industry gained 13% to JPY 105, the most since March 16th 2011.

Nisshin Steel is the largest shareholder of Nippon Metal, holding a 5.12% stake as of March 31st 2011.

(Sourced from www.bloomberg.net)