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Ishikawajima-Harima Heavy Industries Co., Kawasaki Heavy Industries Ltd. and Mitsui Engineering & Shipbuilding Co. have broadly agreed on a comprehensive shipbuilding alliance, industry sources said Tuesday.

A formal announcement is likely to be made this week, the sources said.

Their planned tieup would create the largest shipbuilding alliance in Japan, with some 350 billion yen in combined sales. The projected amount would outpace the roughly 300 billion yen in sales of the industry’s No. 1 company, Mitsubishi Heavy Industries Ltd.

The sources said the three-way alliance may expand to include Sumitomo Heavy Industries Ltd., as IHI has already formed an alliance with that firm involving the integration of their businesses that supply the Defense Agency with naval ships.

Last year, Kawasaki Heavy and Mitsui Engineering agreed to team up in commercial shipbuilding operations.

Among other major Japanese shipbuilders, NKK Corp. and Hitachi Zosen Corp. have also entered talks on an alliance.

Japan’s shipbuilding industry is undergoing a wave of consolidation prompted by increased competition from

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