China has approved the merger of China Merchants Group and Sinotrans & CSC as it continues to restructure its state-owned sector and create companies that can compete internationally.

The country¡¯s State-owned Assets Supervision and Administration Commission (Sasac) said in a statement on Tuesday the merger was cleared by the State Council, China¡¯s cabinet, and that it would no longer directly supervise Sinotrans & CSC. Financial details of the arrangement were not disclosed.

The move is aimed at increasing competitiveness through synergies and scale in an environment of slowing global trade and as China extends its presence in overseas markets.

Sinotrans & CSC is primarily a freight forwarder with services in ocean, air cargo, and land transportation. It also owns express delivery, container shipping, dry bulk, and oil tanker operations. It has seven port-related businesses, at Wuhan, the most populous city in central China, Dongguan in Guangdong province in the south, and Nanjing and Jiangyin in Jiangsu province in the east.

As well as its extensive port operations, China Merchants Group owns China Merchants Energy Shipping, China Merchants Property Development Co, and China Merchants Bank. Its port interests include Chiwan and Shekou container terminals in Shenzhen, a 27% stake in Modern Terminals Limited, the second largest container terminal operator in Hong Kong, and overseas terminal operations in countries such as Djibouti, Lithuania, Nigeria, Sri Lanka, Togo, and Turkey.

In 2014, China Merchants Group booked a profit of USD5.3 billion and had a total asset value of more than USD96.4 billion. The corresponding numbers for Sinotrans & CSC in that year were USD431 million and USD16.8 billion.

¡°The reorganisation aims to achieve economies of scale and synergies, in particular in the areas of logistics, energy and bulk shipping, property development, ports and marine and off-shore engineering between the two groups, to speed up the development of an internationally competitive leading enterprise,¡± Sinotrans said in a filing to the Hong Kong Stock Exchange.

Chinese media reported Sinotrans & CSC chairman Zhao Huxiang as saying the merger with China Merchants would not immediately involve complicated asset swaps between listed units under the two groups.

The merger follows the 11 December approval of a reorganisation of China Ocean Shipping Group (COSCO) and China Shipping Group, which have a combined revenue of more than USD40 billion.

That arrangement will see China Shipping Container Lines exit the container trade and be transformed into a financial services and ship-leasing business. China Cosco Holdings will be the dedicated operator for container shipping, acquiring 33 container companies from CSCL for USD176 million. Terminal operator Cosco Pacific will continue to focus on port investments and operations

China Cosco said scale was a key factor behind the reorganisation. ¡°The listed company will integrate the assets of the two groups for container shipping, expanding the fleet and network to further improve its competitiveness in the international market, close the gap between it and the world¡¯s top three shipping companies, and achieve all-round growth in shipping capacity and shipping line support,¡± it said in its announcement of the merger.