Japanese Majors Confirm Merger Talk

Kawasaki Heavy Industries Ltd. said that it, Ishikawajima-Harima Heavy Industries (IHI) and Mitsui Engineering & Shipbuilding (MES) have started talks on a possible alliance in the shipbuilding business. "We have just started negotiations so we have not decided any concrete plans yet. We do not know yet what kind of alliance we can make," a Kawasaki spokesman said. It is reported that the firms will seek an initial alliance in orders, design and materials procurement, followed by spinning off their shipbuilding business and integration into a joint venture. The three companies have a cumulative shipbuilding business in the range of $3.5 billion.