Brambles is merging its CHEP China pallets business with rival Loscam in a US$132 million ($197 million deal) and will become a small shareholder in the bigger entity in a fiercely competitive China market where scale is key.

Brambles will emerge with a 20 per cent stake in the enlarged entity, with Loscam China to hold the other 80 per cent ofthe group, which will have a stable of 20 million pallets and one million automotive containers and crates.