Xinxing, First Heavy in merger talks: sources

Talks are taking place about a merger between Xinxing Cathay International Group Co and the parent of China First Heavy Industries Group Corp as part of the government's overhaul of State-owned enterprises, sources with direct knowledge of the talks said. Shares of the listed units jumped.

Xinxing's main businesses include metal smelting and processing, as well as textiles and garments, according to its website. First Heavy group provides products and services for industries such as steel and iron, electricity, energy, automobiles and mining.

The plan is preliminary and subject to change, said the sources, who asked not to be identified.