UPDATE 3-Hitachi, Mitsubishi Heavy start merger talks -media

* Two firms eye merger of core units in 2013-Nikkei

* Would create industrial giant with over $150 bln in sales

* Talks sparked by nuclear crisis and strong yen-Nikkei (Adds dateline, background)

TOKYO, Aug 4 (Reuters) - Japan's Hitachi Ltd (6501.T) and Mitsubishi Heavy Industries Ltd (7011.T) are in merger talks to create one of the world's largest infrastructure firms with more than $150 billion in combined sales, the Nikkei business daily and other Japanese media reported on Thursday.

The murky outlook for the nuclear power industry in the wake of the crisis at Japan's Fukushima nuclear plant and the strong yen are among the key factors prompting the talks, the Nikkei business daily said.

The two companies are planning to merge their infrastructure and other core businesses in a new company to be established in 2013, the Nikkei said, adding an announcement of their plans to start merger talks would come later on Thursday.

No one at Hitachi or Mitsubishi Heavy could be immediately reached for comment.

Hitachi is Japan's largest industrial electronics firm with projected annual sales of 9.5 trillion yen. Its runs a vast array of businesses including power plants, construction machinery and information technology systems.

Mitsubishi Heavy is a major producer of heavy machinery with annual sales of about 3 trillion yen.

Both firms had viewed nuclear power as a promising growth area before the Fukushima crisis clouded the industry's prospects.

Hitachi makes boiling-water reactors while Mitsubishi produces pressurized-water reactors. This would allow them to meet the needs of different countries seeking nuclear power plants, the Nikkei said.

The merger would be one of the largest ever in Japan. Hitachi, with a market value of $27 billion, would likely be the acquirer of Mitsubishi Heavy, valued at nearly $16 billion as of Wednesday's closing price. (Reporting by Jochelle Mendonca and Megha Mandavia in Bangalore and Nathan Layne in Tokyo; Editing by Maju Samuel, Bernard Orr)