Mitsubishi Heavy says merger talks with Toshiba: report (Reuters)

TOKYO Mitsubishi Heavy Industries (7011) President said his company does not intend to initiate merger talks with Hitachi (6501), the Mainichi Daily reported Monday, in the first public denial from his Manager.

"There is no truth that we are entering the talks at this time," Mitsubishi Heavy President Hideaki Omiya told the newspaper in an interview, referring to negotiations for a merger with Hitachi.

Leaders Mitsubishi Heavy, the leading manufacturer of heavy machinery of Japan, had remained silent since media reports on Thursday that the company and Hitachi have begun talks on what could lead to the merger of Japan's largest domestic.

A clear rift between the two surfaced almost immediately after the first news reports.

Hitachi Chief Executive Hiroaki Nakanishi told reporters early Thursday that his company would make an announcement later that day regarding relations on their merger talks. But Hitachi, later issued a statement denying the reported merger talks, and the announcement did not take place.

In a separate statement the same day, Mitsubishi Heavy said it had no intention of accepting a merger as reported by the media.

Sources told Reuters that Mitsubishi Heavy had taken into account a partial integration of their social infrastructure, including power generation systems, while Hitachi is looking at a full merger.

For Mitsubishi Heavy, there are strong doubts of a merger, because it would probably be the one that is swallowed their difference in size given.

"Hitachi has an annual turnover of 9 billion yen and Mitsubishi has 3 trillion ... Mitsubishi Heavy people proud to be a leader of the Group Mitsubishi and we don't want to be resumed, "said a Mitsubishi Heavy, who declined to be named.

In the interview with the Mainichi newspaper, Mitsubishi Heavy President Omiya said his company had "several meetings" with Hitachi, confirming that he had taken into account the integration of some of its operations, including social infrastructure systems.

But he has denied the possibility of an all-out merger of the two, saying that his company had no plan to establish a Preparatory Committee of the merger, as has been reported by some media, the paper said.

"We should not try to do everything by ourselves, when we venture into foreign markets such as internal market shrinks," was quoted as saying.

"If credit is available for both sides, we would like to bond with not only Hitachi but with foreign companies," he told the newspaper.

(Reporting by Taiga Uranaka; Editing by Chris Gallagher)

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