Mega mergers to put half of world shipbuilding in three hands
Following last week’s conclusion of the merger of the two state-owned Chinese shipbuilding giants CSSC and CSIC and the planned takeover of South Korea’s Daewoo by compatriot Hyundai Heavy Industries, Japanese shipbuilders Imabari and JMU have also agreed to a capital and business tie-up.
On 29 November the two Japanese yards announced that they are planning a deal which would see Imabari, take a near 30% stake in JMU by purchasing new shares. Imabari's 10 shipyards and JMU's five shipyards together accounted for about 40% of Japan's newbuilding output in 2018. If the deal goes ahead, the combined operation would account for around 10% of world production.
The Chinese and South Korean mergers will both result in giants controlling around 20% each of global ship production. That means that between them, the three would control half of world shipbuilding capacity.
JMU was itself formed by a 2013 merger of JFE Holdings' and IHI's shipbuilding operations but has been financially troubled for some time recording losses in recent financial reports. JMU has tried several times to link with other Japanese builders and there is sentiment in the industry that the capital tie-up with Imabari is a bailout of JMU in all but name.
Along with the capital tie-up, the Imabari and JMU will jointly establish a company to design and sell ships. They will collaborate on a variety of vessels, including cargo ships, tankers and vehicle carriers. LNG carriers will not be part of the picture but the Hyundai takeover of DSME has raised concerns that 60% of LNG carrier production will now be concentrated with one builder.