Plan to merge chem­i­cals giants

The Myanmar Times - - International Business -

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. –

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