Chinese state-owned chemical companies Sinochem and ChemChina are reported to be in talks about a merger to create a chemicals, fertiliser and oil giant. As Hayley Platt reports, a combined entity could generate almost $100 billion in annual revenues.
They're both massive companies in their own right. Together China's state-owned ChemChina and Sinochem would create a giant with annual revenues of $100 billion. The pair - which make everything from refined oil to latex gloves and insecticides - are reportedly in merger talks. Neither side would confirm the reports. China's government is thought to have proposed the deal in an effort to slash the number of state-owned companies. How effective it can be is a question some analysts are asking. (SOUNDBITE) (English) BGC PARTNERS MARKET STRATEGIST, MIKE INGRAM, SAYING: "It's a worrying sign that China is not at all serious about restructuring large parts of its economy, particularly in manufacturing where there's significant over capacity and to a large extent it's just circling the wagons while meanwhile pursuing a stealth devaluation strategy." The reports comes as China National Chemicals, ChemChina's official name, finalises another deal. The $43 billion takeover of the Swiss pesticides and seed group Syngenta - China's largest-ever foreign investment. And if the ChemChina-Sinochem merger does go ahead, IT would be among the largest between two Chinese state-owned enterprises.