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    Japan
     May 2, 2006
Railways on merger track

OSAKA - Hanshin Electric Railway and Hankyu Holdings say they have been holding talks toward integrating their operations.

"We'll be able to offer attractive services by raising the efficiency of our business management via integration," Hanshin Railway president Kyoji Nishikawa said at a news conference in Osaka.

He first broached the idea of a business integration in early April at a meeting with Hankyu Holdings president Kazuo Sumi, he said.

Hanshin Railway has chosen fellow railway operator Hankyu Holdings as a potential partner because "it will likely be easier to



create synergy," with the two firms operating "overlapping businesses in the same or nearby areas", Nishikawa said. "We will likely establish a joint holding company."

Even after the business integration, the Hanshin brand will survive and the Hanshin Tigers professional baseball team will remain under the control of Hanshin Railway, Nishikawa added.

The firms' business integration plans hinge on Hankyu Holdings acquiring the roughly 46% stake in Hanshin Railway that is owned by an investment fund led by Yoshiaki Murakami. Hankyu Holdings is reportedly haggling over the price with the Murakami investment fund.

"Considering that we have been negotiating [with the fund] since September, they are unlikely to reach an agreement easily," Nishikawa said.

Hanshin Railway's board gave the go-ahead last week to begin talks toward strengthening ties with Hankyu Holdings.

Hanshin Railway has revealed it had received proposals that the Murakami fund intends to make at the railway firm's upcoming general shareholders meeting.

But the company did not disclose what the proposals are, citing that it had agreed with the fund not to release that information until Tuesday.

(Asia Pulse/Nikkei)

 

 
 



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