Merging Shinwa Kaiun and Nittetsu Shipping into NS United (2010)

A spirit of equality, and the capital that moved

What catches the eye in this merger is the distance between the phrase “spirit of equality” and the actual movement of capital. The company name put Nittetsu Shipping’s initial first, the president came from Nittetsu Shipping, and Nippon Steel’s voting rights rose from 15.04 to 34.06 per cent. On the other hand the surviving company was Shinwa Kaiun, and it was Shinwa Kaiun’s shares that carried the listing forward. The structure makes it hard to say in a single sentence which side absorbed which: equality in the business and inequality in the capital lived side by side. In that Nippon Yusen, first on the shareholder register since the 1964 consolidation, retreated to second place, it was also a change of keiretsu.

Follow the figures alone and the ¥150 billion revenue target was exceeded twelve years later, return on equity stayed above 10 per cent for four consecutive years, and the company reached a balance sheet on which it could plan ¥300 billion of investment under its own power. Whether that was the effect of the merger alone is harder to judge. Outside conditions — the post-Covid recovery in the freight market and Chinese demand — contributed no small part, and the year to March 2013, immediately after integration, recorded a net loss of ¥15.5 billion. The choice by a mid-sized shipping company to manufacture scale gave it the stamina to ride out the swings of the market, but not the power to control the swings themselves. With the next large investment — renewing the fleet for decarbonisation — ahead of it, how far that stamina reaches is what will now be tested.