Japanese yard merger postponed

JFE Holdings Inc. and IHI Corp. will postpone a merger of shipbuilding operations until after autumn, the Yomiuri newspaper reported, citing an unidentified person familiar with the plan. The companies have decided to delay the merger, which was to take place this month, because of a decline in demand for ships, the newspaper said. In mid-January 2008 it was announced that IHI Corp, Japan's third-biggest heavy-machinery maker, was in talks with JFE Holdings, the nation's second-biggest steelmaker, to create the biggest Japanese shipbuilder to compete against Asian rivals.
The two units could be merged as early as this year creating a company with sales of ¥345bn. IHI Marine United would be merged into Universal Shipbuilding, which JFE is currently seeking to raise its stake in from 50% to 80%, buying out part of Hitachi Zosen's 50% share.