According to a recent report in Reuters, sources with knowledge of the potential tie-up say that ChemChina and Sinochem are more seriously considering a merger. The sources told Reuters that a potential merger could be officially announced by the end of this year. Combined the companies would be worth about $120 billion.
If the deal went through, it would bump BASF from its spot as the world’s No. 1 chemical company.
Rumors about a ChemChina/Sinochem deal have been circulating since late last year. There’s even been speculation about which influential businessman in China would be put in charge of the new company. So far, both companies have dismissed the talk as hearsay.
This news comes as ChemChina inches closer to sealing its deal with Swiss-based Syngenta. So far, that proposed acquisition has been approved by antitrust regulators in the U.S., EU and China. It is still pending approval from India.
With the completion of its Syngenta acquisition almost certain, Reuters reports that ChemChina has been able to take a closer look at merging with Sinochem.
According to Bloomberg, Sinochem is China’s biggest producer of raw materials for the agriculture industry including fertilizers, seeds and agrochemicals. It is also one of the country’s biggest oil companies with more than 300 subsidiaries around the world. The company has about 50,000 employees.
ChemChina has about 140,000 workers and specializes in specialty chemicals, rubber products and chemical equipment.
The Financial Times reports that the companies have radically different corporate cultures. Sinochem operates like a “slow-moving state conglomerate.” And although ChemChina is state-owned, its chairman, Ren Jianxin, has always run the company like an “aggressive” private enterprise.
