SHANGHAI China's Weichai Holdings Group, Shandong Construction Machinery Group Co and Shandong Auto Industrial Group will merge to form an auto parts maker targeting more than 100 billion yuan ($14.6 billion) in sales by 2012, their listed units said on Monday.
The government of eastern China's Shandong province has approved the merger plan in principle, Weichai Power (2338.HK) (000338.SZ), Shandong Juli Co and Shantui Construction Machinery Co (000880.SZ) said in separate exchange filings.
China has been encouraging consolidation in industries such as steel and autos to build world-class companies that can compete with overseas rivals.
The Shandong government said in March it planned to foster eight to 10 large-scale enterprises.
Monday's statements did not give financial details of the planned merger. The three listed companies posted combined sales of more than 40 billion yuan in 2008.
Weichai Holdings owns 14.92 percent of Weichai Power and 30.59 percent of Shandong Juli, while Shandong Construction Machinery has a 21.1 percent stake in Shantui Construction.
(Reporting by Samuel Shen and Edmund Klamann)