The shipbuilders are supposed to strengthen their international competiveness when South Korean and Chinese rivals are going through major realignment to grow stronger. They are negotiating a deal where Imabari, the larger of the two, will take a nearly 30% stake in JMU by purchasing new shares. A final agreement is due by fiscal year-end.

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.

The partners will establish a new company that will design, build and market commercial vessels, including tankers, cargo ships and vehicle carriers.

Imabari and JMU will work together to develop new ship production technology.  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.

Maritime Business World