State-owned travel services provider CITS Group Corp will merge with China Travel Service (HK) Group Corp, creating the country's largest travel services provider, the State-owned Assets Supervision and Administration Commission (SASAC) announced on Monday.

CITS will become a subsidiary of China Travel Service (HK) Group and will no longer be regulated by the SASAC, the commission said in a statement posted on its website.

China International Travel Service Corp, the listed arm of CITS, reported a net profit of 1.5 billion yuan ($224 million) in 2015, up 2.42 percent year-on-year, according to a filing on the Shanghai Stock Exchange. China Travel International Investment Hong Kong, the listed arm of CITS' peer in the merger, reported a net profit of HK$1.35 billion ($174 million) in 2015, down 22 percent year-on-year.

The deal marks the latest major merger among China's State-owned enterprises (SOEs) amid the government's move to increase efficiency in the market.

On June 26, China's two leading steel makers, State-owned Baoshan Iron & Steel Co and Wuhan Iron & Steel Co, announced that their parent firms were mulling a major restructuring deal. The merger would create the largest steel mill in the country.

In 2015, China Minmetals Corp merged with China Metallurgical Group Corp in December, and China CNR Corp and CSR Corp formed CRRC Corp in September.