Japanese Shipbuilders Unite! JFE Universal and IHI Marine Merger Delayed [UPDATE]

*Update* Although JFE Holdings, Inc. and IHI Corporation announced on August 27, 2012 that the management integration of their respective subsidiaries Universal Shipbuilding Corporation and IHI Marine United Inc. would be executed on October 1, 2012, JFE Holdings and IHI have decided to change the effective date to November 1, 2012 because reviews and approval processes regarding competition law are still ongoing overseas.

Original story from 30 January 2012:

TOKYO (Dow Jones)–JFE Holdings Inc. (5411.TO) and IHI Corp. (7013.TO) said Monday they have agreed to merge their shipbuilding subsidiaries effective Oct. 1, in a bid to better compete with sector powerhouses in South Korea and to tackle growing competition from China.

Under the agreement, JFE’s Universal Shipbuilding Corp. and IHI’s IHI Marine United Inc. will merge, with Universal emerging as the surviving entity.

The two companies began tie-up talks in 2008, but the global economic downturn prompted them to review the details of a possible merger.

South Korean shipyards overtook their Japanese counterparts in 2000 in terms of annual shipbuilding as measured by gross tonnage.

Universal Shipbuilding was established in 2002 as a joint venture of Hitachi Zosen Corp. (7004.TO) and the former NKK Corp., which later merged with Kawasaki Steel to create JFE Holdings.

IHI Marine was created in 2002, though a spinoff of shipbuilding operations from IHI’s former entity Ishikawajima-Harima Heavy Industries Co.

-By Hiroyuki Kachi, Dow Jones Newswires