GERMAN shipping giant Hapag-Lloyd, the six largest container line in the world, is nearing a deal to buy Chilean shipping company CSAV (Compania Sud Americana de Vapores), ranked 20th, reported the German daily Die Welt.

"We want to reach an agreement by the end of January," a Hapag-Lloyd manager told the newspaper, but both Hapag and CSAV have declined comment, Reuters reported.

CSAV, which has a market capitalisation of US$845 million, said in December that it was in merger talks with Hapag-Lloyd after suffering significant losses caused by low freight rates, high fuel prices and expensive leases.

Under the deal, CSAV will take 30 per cent of Hapag-Lloyd, the newspaper reported, adding that it was still unclear whether its 54 ships will be part of the transaction or whether they will just be leased to Hapag-Lloyd, adding to its 152 ships in service.

Earlier, Hapag-Lloyd owners called off a planned merger with rival German line Hamburg-Sud, ranked 13th, over control issues.

The Luksic family, Chile's richest and CSAV's main shareholder since it injected US$1.2 billion into the company, is happy to hold a minority stake in the merged group, Die Welt said, citing a source close to the family.