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Japan Shippers Merger Ambitious?

The problem in the proposed merger of Japan's three biggest shipping companies (Nippon Yusen, Mitsui O.S.K. Lines and Kawasaki Kisen Kaisha) is, that synergy number looks ambitious - and if it falls short, the players haven't really improved their position much, says Bloomberg. A business is rarely more than the sum of its parts. That's a problem for anyone hoping that combining Japan's big three container-shipping lines will produce a stronger company and the world's sixth-biggest line. The joint venture would see savings of more than $1bln a year. With a fleet of 256 container vessels, the proposed business would hold about 7% of the world shipping market. The promised 110 billion yen in annual synergies -- or 27.5 billion a quarter -- would change things dramatically.