Japan's biggest shipbuilders Imabari Shipbuilding and Japan Marine United (JMU) have formalized their business alliance by agreeing to enter into a capital tie-up amid blockbuster mergers in South Korea and China.
According to Jiji Press, with the alliance, the shipbuilders aim to strengthen their international competitiveness at a time when South Korean and Chinese rivals are going through major realignment to grow stronger.
Under the basic deal Imabari Shipbuilding plans to buy a nearly 30 pct stake in JMU via a shares purchase. The duo plans to finalize the agreement within the 2019 fiscal year, ending in March 2020.
The partners will establish a new company that will design, build and market commercial vessels, including tankers, cargo ships and vehicle carriers. Imabari and JMU will work together to develop new ship production technology.
Together, Imabari and JMU account for about 40 percent of the Japanese shipbuilding market.
A report by Nikkei said that the alliance would control about 10% of the global shipbuilding business -- only half as much as the behemoth formed by this month's merger of China State Shipbuilding Corp. and China Shipbuilding Industry.
Meanwhile, South Korea's Hyundai Heavy Industries is finalizing its merger with domestic peer Daewoo Shipbuilding & Marine Engineering. The new company would also command a roughly 20% global share.
