June 12, 2020 / 7:45 AM / 2 months ago

Mitsubishi Heavy says in talks to acquire Mitsui E&S ship business

FILE PHOTO: The logo of Mitsubishi Heavy Industries is seen at the company's Sagamihara plant in Sagamihara, Japan, July 4, 2016. REUTERS/Maki Shiraki

TOKYO (Reuters) - Mitsubishi Heavy Industries (7011.T) said it had agreed to begin talks with Mitsui E&S Holdings (7003.T) to acquire its shipbuilding business.

A deal to acquire Mitsui E&S’s shipbuilding unit could help Mitsubishi Heavy, Japan’s biggest defence company, better compete for naval contracts. It could also mark a tentative step towards consolidation among Japan’s numerous military equipment makers.

“Mitsui E&S has strengths in shipbuilding and repair for the Ministry of Defense including supply vessels and observation ships,” Mitsubishi Heavy said in a statement.

The two companies will aim to reach a deal by the end of the year, with Mitsubishi to acquire the unit by October next year if it received approval from regulators, it said.

Reporting by Tim Kelly; editing by David Evans

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