August 30, 2008

JFE to take over Hitachi Zosen stake in Universal Shipbuilding Corp

World’s third largest steelmaker Japanese JFE Holding Inc plans to take control of a shipbuilding joint venture by spending USD 289 to USD 385 million.

JFE announced that that it will take 85% control of Universal Shipbuilding Corp., now owned equally by the JFE group and Hitachi Zosen Corp. It will buy a 34.9% Universal Shipbuilding stake from shipbuilder and heavy machinery maker Hitachi Zosen for JPY 34,933 million by March 31st 2008 and Universal Shipbuilding will therefore become another core operating subsidiary of JFE Holdings.

Universal Shipbuilding, based in Kawasaki, Kanagawa Prefecture, eastern Japan, was formed in 2002 through the integration of the shipbuilding operations of Hitachi Zosen and former NKK Corp, one of the two companies that established the JFE group in the same year. Universal Shipbuilding generated sales of JPY 160,002 million in fiscal 2006 that ended in March 2007 up by 14.5% YoY. It ranks second among Japanese shipbuilders after Imabari Shipbuilding Co. based in Imabari, Ehime Prefecture,
This move may help JFE to merge its shipbuilding business with heavy machinery producer IHI Corp. The joint company, Universal Shipbuilding, will become the world’s sixth largest shipbuilder after merger with IHI’s operations. The annual output will yield about 3 million tonnes with annual sales amount of more than USD 3 billion.