Japan's largest shipbuilder, Imabari Shipbuilding, is acquiring a domestic rival, Minaminippon Shipbuilding, from April 1.
Imabari executives say they have reached a basic agreement to take over the operations of Minaminippon (which translates as "Southern Japan"), with further discussions being held to reach a final agreement.
The goal, they say, is to boost production capacity and international competitiveness at a time when competition from Chinese and South Korean companies is causing several Japanese shipbuilders to merge or review their businesses.
Minaminippon, which builds and repairs mainly tankers and vehicle carriers, has annual sales of US$180 million.
Its shareholders include Mitsui Engineering and Shipbuilding and Mitsui OSK Lines. It has four 6,800CEU car carriers and two 50,000DWT tankers under construction.
Imabari, which runs nine shipyards in the Seto Inland Sea region, has an order book of more than 120 vessels. Meanwhile, Shoei Kisen (the shipowning arm of Imabari) has placed a US$1.8 billion order for ten 11,000TEU neo-Panamax container ships at Imabari.
With an option for another 10 vessels, deliveries will begin in 2020.
The order is backed by long-term charters to Evergreen Marine of Taiwan.
Each are estimated to cost $90 million.