The share price of NKK Corp. has been steadily approaching that of Kawasaki Steel Corp. over the past few weeks amid rumors of an imminent merger.
“The market has started factoring in the merger,” one trader said.
The large gap between the two firms’ share prices was considered a major obstacle in preventing the two from accepting any merger agreement.
NKK has broken through the 100 yen level for the first time in a year and a half.
Since the beginning of February, NKK has divulged a series of measures to rehabilitate its management, including tieup accords with other companies to push their shipbuilding and machinery-manufacturing plant business.
These announcements have pushed up NKK’s share price, while Kawasaki Steel’s has remained trapped between 120 yen and 130 yen since the beginning of February.
Since NKK did not give investors any market-moving news over the past two days, some analysts described the fast rise in its share prices as evidence of the growing market view that the two are on the verge of a deal.
An NKK official sought to downplay the view that the rise has emanated from the merger rumors, but added, “No one can be sure about what will happen tomorrow.”
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