Absorbing Fujinagata Shipbuilding at five shares for four (1967)

A merger with the alliance placed first

The stock phrase of the day — preparing for an open economy — does not bring the outline of this merger into view. What Mitsui Shipbuilding received from Fujinagata was centred not on slipways but on the land-based divisions. Fujinagata’s chemical machinery business, begun in 1927 with machinery for the chemical industry, handled plant end-to-end from pharmaceuticals to oil refining, and carried municipal environmental and sanitation equipment together with steel frames and bridges. For a company whose earnings swayed with every turn of the shipbuilding market, taking on that product range along with 2,000 engineers was no small thing.

It would nonetheless go too far to credit the smoothness of the merger to Mitsui’s judgement alone. A business alliance in March 1965 had already unified technology and sales, explicitly set a merger within three years as the goal, and built relationships across newbuilding, diesel engines and chemical machinery before the agreement was signed. Neither the five-for-four ratio nor the commitment to take on every employee could have been put on the table without those two years of groundwork. What decides whether an integration is possible is less the skill at the negotiating table than what the parties had already shared before they reached it.