China’s two state shipping giants will combine their container-shipping assets among other restructuring efforts, as part of a multibillion-dollar merger to strengthen the nation’s competitiveness in an industry battered by weak demand and persistent overcapacity.

China’s State Cabinet on Friday approved the merger between China Ocean Shipping (Group) Co., or Cosco Group, and China Shipping (Group) Co., according to statement posted on the website of China’s state-owned Assets Supervision and Administration Commission, ending years of speculation among analysts that the government would ultimately combine the two groups to boost efficiency.

The planned merger comes as the nation attempts to reform its state-owned businesses, in the hopes of creating bigger and stronger national champions that can better compete abroad

As reported by The Wall Street Journal, the merger involves combining Cosco and China Shipping’s listed container-shipping operations to create the world’s fourth-biggest container-shipping line, after AP Moller Maersk Group, Mediterranean Shipping Co. and France’s CMA CGM SA.

China Cosco Holdings Co. said in an exchange filling that it plans to consolidate the container-shipping operations with its state-backed rival China Shipping Container Lines Co. through acquiring a total of 33 container-shipping related units and affiliates from CSCL for 1.14 billion yuan ($177 million) and leasing its container ships.