Mitsui E&S and Tsuneishi work on further driving consolidation in sector
The key terms and conditions of a business tie-up between Japanese shipbuilders Mitsui E&S Shipbuilding Co and Tsuneishi Shipbuilding have been agreed upon, further driving consolidation in the sector.
As part of its Mid-Term Business Plan 2020, Mitsui announced plans to separate its naval shipbuilding and merchant shipbuilding businesses.
The strategy focuses on reducing unprofitable companies and strengthening the company's financial position. It is being implemented in response to losses in the engineering industry from major overseas EPC ventures, as well as declining profits in shipbuilding and engineering.
As a result, Mitsubishi Heavy Industries (MHI) and Tsuneishi Shipbuilding have agreed on the fundamental terms for developing new merchant shipbuilding businesses aimed at both domestic and foreign markets.
Mitsui E&S Holdings will move 49 percent of the total number of issued shares of its merchant shipbuilding company to the new business, which will be majority-owned by Tsuneishi, according to the agreement, which is expected to be completed by the end of March 2021.
MHI has also reached an agreement with Mitsui E&S Holdings to take over the company of naval and governmental ships.
Mitsui E&S Shipbuilding specializes in the design and repair of auxiliary ships for the Japanese Ministry of Defense, such as supply ships and oceanographic survey ships, as well as governmental ships.
MHI, on the other hand, requires intensive operations in a wide range of systems and equipment for ground, sea, and air defense, as well as developing, designing, and building naval vessels.
MHI will take over Mitsui E&S Shipbuilding's naval and governmental shipbuilding activities, including AUVs and ASVs, under the newly signed agreement. MHI will operate as an operating entity, with the Tamano Works continuing to operate.
Maritime Business World