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Shares of Hitachi and Mitsubishi Heavy get merger boost | Shares of Hitachi and Mitsubishi Heavy get merger boost |
(about 7 hours later) | |
Shares in Japanese infrastructure giants Hitachi and Mitsubishi Heavy have gained on merger speculation. | |
Foreign and domestic media reported on Thursday that the two firms were set to start talks to merge some businesses. Both companies denied the reports when contacted by the BBC. | |
Hitachi shares ended the day up 1.7% while Mitsubishi Heavy was up 3.4%. | |
Hitachi and Mitsubishi Heavy are two of Japan's biggest firms, and a merger could help make them more competitive. | |
A weakening domestic market means many Japanese firms want to cut costs, while they are also facing increased competition from foreign rivals. | A weakening domestic market means many Japanese firms want to cut costs, while they are also facing increased competition from foreign rivals. |
"If the merger is confirmed it'd be very positive news for Japanese industry," said Kiyoshi Noda from MU Investments. | |
"Because Tokyo companies wouldn't compete against each other when bidding for overseas infrastructure projects, thus increasing their chances and through this helping the country's economy," | |
Hitachi president Hiroaki Nakanishi told Japanese media that an announcement on the merger would be made on Thursday. | |
However, both companies later denied this, saying no announcement was planned. | |
News providers including Bloomberg, Agence France Presse, Nikkei Business Daily and the Wall Street Journal carried reports on Thursday claiming that the two firms were about to start talks regarding a possible merger. | News providers including Bloomberg, Agence France Presse, Nikkei Business Daily and the Wall Street Journal carried reports on Thursday claiming that the two firms were about to start talks regarding a possible merger. |
The Nikkei reported that the uncertain future of nuclear in Japan, a field both Hitachi and Mitsubishi Heavy were looking to as a source of growth, as well as the strength of the yen sparked the talks. | |
An alliance between the two companies would create one of the world's largest infrastructure companies, according to the Nikkei. |
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