SHANGHAI - Chinese transport conglomerate China Merchants Group is in talks to acquire logistics group Sinotrans & CSC in the latest deal in the country’s state sector, financial magazine Caixin reported late on Monday. The two companies have been locked in reorganization talks, Caixin said, citing sources close to China Merchants. Officials from both companies declined to comment on the talks when contacted by Reuters on Tuesday. The two Hong Kong-listed units of Sinotrans & CSC - Sinotrans and Sinotrans Shipping - informed the Hong Kong stock exchange on Sunday that their parent group was considering a strategic reorganization that involved another unnamed state-owned enterprise. Caixin said at the end of 2014, China Merchants had total assets worth 624.16 billion yuan ($97.92 billion) while Sinotrans & CSC had 109.12 billion yuan, making China Merchants the bigger player of the two. The move comes as the Chinese government is encouraging restructuring and mergers among state-owned enterprises. The domestic shipping industry’s two largest firms, China Ocean Shipping (Group) Company and China Shipping Group, are also in talks to merge, a source told Reuters in August. China Merchants’ business includes ports, shipping and financial services, while Sinotrans & CSC is involved in logistics and vessel chartering. ($1 = 6.3744 Chinese yuan renminbi)