Plan to merge chemicals giants
BEIJING is planning a mega-merger of chemicals giants Sinochem and China National Chemical Corp in a massive deal that would reshape the chemicals industry, Bloomberg News reported.
The companies together would control assets worth more than US$100 billion, it said.
The deal comes as authorities attempt a vast restructuring of China’s economy intended to weed out inefficient, debt-saddled companies by forcing them to combine with better-placed competitors or face bankruptcy.
But the transition faces hurdles, as politically connected state-owned companies resist painful reforms, and Communist Party officials are reluctant to see large-scale layoffs that could lead to social unrest.
China National Chemical Corp, also known as ChemChina, made a $43 billion takeover offer earlier this year for Swiss pesticide and seed giant Syngenta, in what would be by far the biggest-ever overseas acquisition by a Chinese firm.
But $15 billion of financing crucial to the acquisition was still missing as of this month, Chinese financial media Caixin reported.
It was unclear how the Chinese merger would affect the Syngenta deal, as details of the transaction had not been announced, Bloomberg said.
Syngenta rebuffed US rival Monsanto three times last year before finally agreeing to the ChemChina offer. –