The tie-up between Nippon Steel and Sumitomo Metal Industries will create a steel giant second only to ArcelorMittal, and just ahead of China's Baosteel.

Shareholders approved the merger, which will go into effect on October 1, at general meetings of each company, the firms said in a joint statement. It was the final go-ahead needed for the deal.

The new company, Nippon Steel & Sumitomo Metal Corp., "will aim to achieve 60 to 70 million tons in terms of global production capacity", the companies said last September.

Global competition in the steel industry has intensified in recent years, while demand has been spurred by emerging economies such as China, which are undertaking massive construction, infrastructure and manufacturing projects.