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Monday December 11, 3:35 PMJapan seafood maker Maruha to merge with NichiroTOKYO, Dec 11 (Reuters) - Japanese seafood supplier Maruha Group Inc. said on Monday it will merge with smaller rival Nichiro Corp. via a share swap, sending the whole seafood sector higher on expectations of a further shakeout.Industry leader Maruha, which will be the surviving company in the merger, said the swap ratio has not been decided, and that the new entity, Maruha Nichiro Holdings Inc, will be established on Oct. 1, 2007. Masaki Iso, chief investment officer at Yasuda Asset Management, said the merger is positive news for both companies because it would accelerate a realignment in the industry, which is facing both a shrinking domestic market and tougher fishing regulations. "It is natural that the companies seek economies of scale by merging their operations," said Iso. "The news shows that the management of the two companies shared a sense of crisis in light of realignments in other industries." The new company aims for an operating profit of 30 billion yen ($260 million) on sales of 1 trillion yen in 2010. That would be up from the two firm's combined operating profit of 15.2 billion yen in the year ended March 2006 and combined revenues of 973.4 billion yen. Maruha shares had gained 6.4 percent to 250 yen and Nichiro had jumped 9.8 percent to 212 yen before the Tokyo Stock Exchange temporarily suspended trading in both stocks in the late afternoon following media reports of the merger. Shares in other seafood and fishery-related companies followed Maruha and Nichiro higher. Nippon Suisan Kaisha Ltd. , a seafood processing company, closed up 5.8 percent at 680 yen, while Kyokuyo Co. Ltd. rose 7.8 percent to 262 yen. Maruha and Nichiro plan to hold a news conference in Tokyo at 6 p.m. (0900 GMT). ($1=116.75 Yen) (Additional reporting by Aiko Hayashi) |
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