Namura takes over Sasebo

Namura Shipbuilding is set to take over Sasebo Heavy Industries in an acquisition that will create Japan’s second largest shipbuilding group.

The deal will see Sasebo delisted from the Tokyo and Fukuoka stock exchanges to become a wholly owned Namura subsidiary.

Both companies have agreed to complete the deal in October 1 this year.

Namura president Tatsuhiko Namura said that the move is part of a survival strategy to create a shipbuilding company that can compete with the South Korean giants in terms of the scale of business and also develop the fuel efficient designs of the future.

He said: “By bringing together the management of both companies we plan to create efficiencies that will allow us to survive.”

The pair have been discussing a merger for the past three years and want to develop into gas carrier construction.

The move is also part of a merger and acquisition trend in Japanese shipbuilding that resulted in the merger of IHI Shipbuilding and Universal Shipbuilding to create Japan Marine United (JMU) last year. JMU is now Japan’s largest shipbuilder based on sales.

As part of the deal Namura is set to issue 20.5 million new shares and acquire Sasebo based on a ratio of one share for every 0.128 Sasebo shares.

Namura is quoted on the Osaka Stock exchange where at its current share price it is valued at JPY 42bn ($412m), with Tokyo listed Sasebo valued at JPY 16bn.

Shipbroker Clarksons estimates the Namura backlog is made up of 47 ships amounting to 2.8 million dwt. Sasebo’s orderbook amounts to 25 vessels of 1.9 million dwt.

Last fiscal year Namura registered consolidated sales of JPY 114bn and a net profit of JPY 5.5bn. Sasebo recorded sales of JPY 30bn and a net loss of JPY 600m.

Namura Shipbuilding is regarded as one of Japan’s more financially secure shipyards and in a similar move earlier acquired Hakodate Shipbuilding.