Hafnia, a global leading tanker operator, has acquired a significant stake in rival Torm and has signalled plans to for a major merger that would combine the two leading fleets in the segment.

The two companies said in a joint statement that Hafnia has acquired approximately 14 cent of Torm’s issued share capital from Oaktree Capital Management, using a combination of Hafnia’s own working capital and credit facilities to finance the purchase. The of the equity purchase is sufficient to give Hafnia a nomination right on behalf of Torm’s board. The transaction is subject to closing conditions including receipt of regulatory approvals Denmark and Brazil and all conditions precedent were met at the time of the announcement.

Hafnia said it “believes that industry consolidation is positive for the tanker industry a whole and for the shareholders of both companies” and is in the process of evaluating various business combination scenarios. It plans to approach Torm’s board to discuss a potential combination

The deal, if completed, would create a combined platform with a market value of about $5bn and a fleet of nearly 300 vessels, far larger than other major competitor and could reshape the global product tanker market landscape, industry analysts said.

Hafnia is the world’s largest chemical and product tanker, transporting crude and a range of products for blue-chip oil majors. BW Group, an energy shipping conglomerate, has a 44 per cent controlling stake inafnia and also has independent business units for LNG, LPG, specialty gases, dry bulk, offshore wind and floating production storage and offloading (FPSO) solutions