Cosco Shipping lines is leading a bid to buy rival Orient Overseas (International) Ltd (OOIL) for HK$49.25 billion ($6.3 billion), as consolidation in the shipping industry continues.

OOIL is the seventh largest container shipping company in the world, with extensive container shipping routes and networks. Cosco Shipping is currently the fourth largest container shipping company, with 327 ships providing a capacity of 1.7m TEUs.

Orient Overseas Container Line (OOCL), a wholly owned subsidiary, is one of the world’s largest integrated international transportation, logistics and terminal companies.

The controlling shareholders with 68.7% of OOIL have irrevocably undertaken to accept the offer, which Cosco has made with Shanghai International Port Company. Once the takeover goes through, Cosco will end up with 90.1% of OOCL while Shanghai Port will hold the remaining 9.9% stake.

Post-closing, the combined Cosco Shipping Lines and OOIL will become one of the world's leading container shipping companies, with more than 400 vessels and a capacity of over 2.9m TEUs, including ships already on order.

The deal is just the latest in a series of announcements reflecting continuing consolidation in the shipping industry, which is suffering from record low rates and overcapacity.

Other examples include the agreement announced in October last year by global maritime logistics providers Kawasaki Kisen Kaisha (K Line), Mitsui OSK Line (MOL) and Nippon Yusen Kabushiki Kaisha (NYK) to integrate their respective container shipping businesses into a new joint venture – a move the European Commission recently approved – and Maersk Line’s deal to buy Hamburg Süd for €3.7 billion ($4 billion), announced last December.

In January this year, meanwhile, China’s government approved the multi-billion dollar merger of its state-owned shipping and logistics giant CMG with rival Sinotrans & CSC Holdings, also a state-owned firm.