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ChemChina discussing merger with Sinochem

Chinese state-owned chemical companies Sinochem Group and ChemChina are in discussions about a possible merger to create a chemicals, fertilizer and oil giant with almost $100 billion in annual revenue, three sources familiar with the matter said.

The deal has been proposed by China's central government as part of its efforts to slash the number of state-owned companies and create larger, more competitive global industry players, said the sources.

"The government has given the mandate to let Sinochem lead in this potential merger with ChemChina," said the source.

A second source familiar with the matter said both firms have started due diligence work looking into each other's financial details and business segments.

While still at an early stage, the talks come as China National Chemicals Corp, as ChemChina is officially known, finalizes a $43 billion takeover of Swiss pesticides and seed group Syngenta. That deal would be China's largest-ever foreign investment.

Read more at Reuters
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