Japan’s Mitsubishi Materials Corp has signed letter of intent regarding the merger of its cement business with Ube Industries Ltd. The company’s will now begin discussions regarding the integration and plan to sign a definitive agreement around September 2020.

The two companies already have a joint venture, Ube-Mitsubishi Cement Corp, established in 1998.

"While the business situations surrounding the cement business in Japan are currently undergoing significant changes, including slowing demand and increased costs due to higher energy prices, it is necessary for Mitsubishi Materials and Ube Industries to establish a new framework for their cement businesses that builds upon the existing relationship including the joint venture, in order to realise the future growth of their cement businesses," said the company in a press release.

The scope of the integration is expected to include the cement and ready-mixed concrete businesses, limestone resource businesses, energy and environmental-related businesses, construction material businesses, and other related businesses of Mitsubishi Materials and Ube Industries, both in and outside of Japan, according to a statement.