Image copyright EPA

Chinese shipping giant Cosco is set to buy its Hong Kong rival OOIL for $6.3bn (£4.9bn).

The deal would make Cosco the world's third biggest shipping company, with more than 400 vessels.

OOIL's majority owner has accepted the bid, though the sale will still need regulatory approval.

It would be the latest in a wave of mergers, which has left the top six shipping lines controlling almost two thirds of the market.

Overcapacity struggles

OOIL's subsidiary OOCL is currently the world's seventh largest shipping line, with 3.2% of global market share, according to shipping database Alphaliner.

Cosco is offering $10.07 per share, a 38% premium over OOIL's closing price on Friday.

The family of Hong Kong's first Chief Executive Tung Chee-hwa founded OOIL, and still holds a 69% stake in the company.

They have accepted the offer, but it still needs the approval of Cosco shareholders, as well as US and Chinese regulators.

Overcapacity and slowing demand is leading to major changes in the shipping industry.

Korean shipping giant Hanjin filed for bankruptcy last year, while France's CMA CGM bought Singapore's Neptune Orient Lines.