Japan’s Mitsubishi Heavy Industries (MHI) is to hold talks with Mitsui Engineering & Shipbuilding (Mitsui E&S) over the potential acquisition of the company’s naval and commercial shipbuilding business.
A spokesperson for MHI told Janes on 15 June that the two sides have agreed to “commence formal discussions” over the transaction. The spokesperson did not disclose any additional details.
MHI earlier indicated that the acquisition would strengthen its defence shipbuilding operations. “Mitsui E&S has strengths in shipbuilding and repair for the Ministry of Defense including supply vessels and observation ships,” MHI said in a statement reported by the Reuters news agency.
MHI is looking to acquire Mitsui E&S’ shipbuilding business, which in January launched the JMSDF’s third Hibiki-class ocean surveillance ship. (JMSDF)
Mitsui E&S said that the potential sale of its naval shipbuilding business would enhance MHI’s “products and technologies [to] further contribute to Japan’s security and enhance its corporate value”.
Mitsui E&S added that the two sides want to conclude a deal by the end of the year, with the shipbuilding transfer completed by October 2021.
In late 2019 the two companies are also thought to have held discussions about a possible amalgamation with a view to collaboration on defence contracts. Such engagement was driven, in part, by growing fiscal challenges facing Mitsui E&S, which has posted net losses over the past three years.
A spokesperson from Mitsui E&S told Janes in November 2019, “We have been seeking a wide range of tie-ups and collaboration possibilities with other shipyards within and out of individual projects. We will continue to do [this] and make efforts to strengthen our competitiveness in various aspects.”
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