Hapag-Lloyd and Compania SudAmericana de Vapores will win conditional European Union approval for their merger that will create the world's fourth-largest container shipping company, sources said.

The tie-up is important for the shipping industry where consolidation could help it to overcome the worst slump on record. And if regulators take a soft line on any concessions required to allow the deal to proceed, this could spur more mergers in the industry.

EU approval hinges on the elimination of some overlapping routes between the consortia in which the companies are members. This would allay concerns that the deal could reduce competition, said the sources.

Hapag-Lloyd is a member of the G6 alliance whose other members include APL, Hyundai Merchant Marine, Mitsui OSK Lines, Nippon Yusen Kaisha and Orient Overseas Container Line. It operates on Asia-Europe and Mediterranean trade routes.

Vapores, majority-owned by the billionaire Luksic family, Chile's richest, is a member of another smaller group.

A shipping industry source predicted more mergers, saying the Hapag-Lloyd and Vapores deal could be the benchmark.