The subsidiaries of two Chinese shipping groups, China Merchants Enegy Shipping (CMES) and Sinotrans & CSC Group, have come together to establish a VLCC joint venture valued at $1.11bn.

CMES will own 51% of the joint venture by providing $565.94m worth of assets including 9 operational VLCCs and 10 VLCC newbuild contracts.

Sinotrans & CSC will invest $543.78m in cash to own the remaining 49% stake in the joint venture.

The deal is expected to be completed before 30 September 2014.