As Syngenta deal closes, ChemChina and Sinochem press $120b deal


Sinochem and ChemChina, a Chinese agency, is engaged in merger negotiations to create the world's largest industrial chemical company, headed by Sinochem chief, Ning Gaoning, said four people with knowledge of the negotiations.

An agreement could be announced by the end of the year, the public said, potentially only a few months after ChemChina bought its own $ 43 billion purchase from Syngenta in Switzerland, The largest overseas contract in China to date.

A consolidation of Sinochem and ChemChina was worth about $ 120 billion, said one of the people, leading companies like the giant industrial chemical BASF.

Talks to establish a Chinese chemical plant were first reported last year, but were rejected by both companies as a rumor.

Sinochem and China National Chemicals Corp., while ChemChina is officially known, did not immediately respond to requests for comments on Tuesday. A Syngenta spokesman said the company was aware of any maintenance.

Both companies have speeded up negotiations after regulators last month purged the acquisition of Syngenta by ChemChina, according to the people. With the approval of more than 80 percent of Syngenta 's shareholders completing the completion of this deal, the focus has been on the establishment of a Chinese power plant.

Beijing considers a Sinochem / ChemChina deal as a plan to rationalize and consolidate its state-owned state owned enterprises, people said, leaving fewer more powerful national champions.

"This is the priority now for both companies." The top message to managers is very clear: do not be distracted by anything else, "said one of the people, 39 emphasis on this agreement was taken into account One party for Sinochem recently abandoned a plan to invest in Noble Group, a lossless product trader.

An agreement is not yet final, and the 19th Congress of the Chinese Communist Party later this year leaves room for some political uncertainty.

The expected retirement of ChemChina chief, Ren Jianxin in January, can speed up the process, said one of the people, to allow a transfer period.

Ren, known for bold deals, including Syngenta and the purchase of the Italian tyremaker Pirelli, spent more than a decade and billions of dollars expanding from ChemChina, founding a popular noodle chain on my way.

He may have mistreated the authorities with his chutzpah to go ahead with large-scale offers, another of those who knew the discussions said. Ning, who has made a name as head of the Cofco Food Processing Group, is considered politically well connected.

"The breadth of Syngenta's agreement means that Beijing wants to ensure it is well managed," said one person from the oil and gas industry. gas. Although Syngenta's ambitious recovery has provided China with a portfolio of leading chemicals and patent-protected seeds to improve agricultural production, it also leaves ChemChina with a high debt.

Last year, ChemChina granted $ 32.9 billion in bridge loans with more than 20 Chinese, European and Asian lenders, giving it a certain level that investors and analysts believe Be too high.

Combining Sinochem and an expanded ChemChina will put the group among the world leaders in competing chemical, fertilizer and petroleum industries – a giant overseas and a major challenger inside Sinopec And PetroChina.



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