Kawasaki Heavy and Mitsui Engineering deny merger talks

Japanese heavyweights Kawasaki Heavy Industries Ltd and Mitsui Engineering & Shipbuilding Co today denied media reports that they will enter into merger talks in order to consolidate and compete globally.

The Nikkei today reported that the shipbuilding giants are set to enter into merger negotiations and aim to complete the merger in the fiscal year ending March 2015.

Kawasaki issued a press release saying, "This is not what we have announced and there is no truth to the report," while Mitsui issued a statement in similar lines saying "this is not what we have announced."

Without citing sources, the Nikkei said that both companies the firms will merge into a new entity in order to revive their sagging businesses by cutting procurement costs and boosting research and development.

The merged company would have almost 2.0 trillion ($20 billion) in annual sales, behind market leader Mitsubishi Heavy Industries, it said.

Founded in 1878 and based in the western port city of Kobe, Kawasaki Heavy is one of Japan's top three heavy machinery maker manufacturing submarines, high-speed trains, gas turbines, Ninja racing bikes, aerospace equipment and others.

Despite an increase in revenues from $12.3 billion in 2011 to $13.1 billion in 2012, the company's net income has fallen from $260.2 million to $233.7 million.

Founded in 1917 as the shipbuilding arm of Mitsui & Co, Mitsui Engineering is one of a leading maker of ship engines.

The Tokyo-based company builds and repairs ships and offshore development equipment, such as bulk, ore, and LNG carriers; crude oil tankers, unmanned underwater vehicles, ship handling simulators, high-speed and patrol vessels and cargo handling equipment. 

The company posted net income of $179 million on revenues of $5.7 billion.