Chilean shipper Compania SudAmericana de Vapores on Wednesday said it has signed a binding deal with Germany’s Hapag-Lloyd to create the world’s fourth-largest container-shipping company. The terms of the agreement are unchanged from those in the memorandum of understanding the companies announced in January, including two capital increases totaling 740 million euros ($1 billion). The second capital hike, for 370 million euros, would be part of Hapag-Lloyd’s planned debut on the stock market. Vapores will contribute 259 million euros to the first capital increase and end up with a 34 percent stake in Hapag-Lloyd. Shipping groups have been struggling through the worst slump on record, as they grapple with low freight rates brought by overcapacity and a weak global economy. No. 1 shipper Maersk Line, a unit of A.P. Moller-Maersk , Switzerland-based MSC Mediterranean Shipping Company and France’s CMA CGM, have agreed to set up a three-way alliance that could control more than a third of the market. Vapores, majority-owned by the billionaire Luksic family, Chile’s richest, has been battling steep losses caused by the low freight rates, high fuel prices and expensive leases. The business combination is subject to approval by the City of Hamburg’s Senate by April 30. Also, according to the terms of the deal, if more than 5 percent of Vapores’ total shareholders exercise withdrawal rights by April 20, the deal will be annulled. It is not the first time Hapag-Lloyd, the world’s No. 5 container shipping company by capacity and burdened by 2.35 billion euros of net debt, has sought expansion through mergers, but deals have proved elusive. Last year it held talks with German peer Hamburg-Sued over a deal but the parties were unable to agree terms. Travel group TUI AG holds a 22 percent stake in Hapag-Lloyd and said that will drop to 13.9 percent as a result of Hapag-Lloyd’s tie-up with Vapores. TUI will not participate in the planned capital increase. TUI, which has long planned to exit shipping to focus solely on tourism, will get priority placement rights for its remaining stake as part of Hapag-Lloyd’s planned stock market flotation in 2015, it said in an internal letter, seen by Reuters.