SNP China Petroleum and Chemical Corp

TOKYO--Mitsubishi Chemical Holdings Corp. (4188.TO) said Tuesday it will make a decision on strengthening its capital alliance with affiliate Taiyo Nippon Sanso Corp. (4091.TO) later in the day.

The move will help strengthen Mitsubishi Chemical's position in the battle with larger global rivals as BASF SE (BAS.XE) and Sinopec Corp. (600028.SH).

The Japanese company said it will hold a board meeting later Tuesday to make a decision on a further alliance with its Japanese peer, without giving further details.

Assuming Mitsubishi Chemical will carry out a tender offer among other steps to boost its stake in Taiyo Nippon Sanso from its current 27% holding, an additional stake buy to take a majority would cost at least Y80 billion ($783) on the basis of Taiyo Nippon Sanso's closing price on Monday.

The announcement followed local media reports earlier Tuesday that Mitsubishi Chemical will buy a majority stake in its affiliate for Y100 billion.

Write to Tokyo Bureau at tokyo.djnews@wsj.com