China said to be close to scrapping ChemChina-Sinochem merger

Photo: Bloomberg

China is planning to abandon a merger between state-owned giants ChemChina and Sinochem, the Financial Times reported, citing two people it didn’t identify.

The process was marred by challenges in bringing the two groups’ management teams together and over how the U.S. would treat the change of ownership of their global assets, including Swiss pesticide producer Syngenta AG, according to the report.

Instead of a full merger, Sinochem will probably attempt to take over several of ChemChina’s most-valuable assets in an acquisition much smaller than originally planned, according to the report. One of the people added that the merger process had not been completely abandoned.

Press officials at both companies didn’t immediately respond to requests for comment. China’s State-owned Asset Supervision & Administration Commission didn’t immediately respond to faxed questions.

The merger, which has been in the works for at least three years, was set to reshape the global chemicals industry and create an oil-to-chemicals company with more than $100 billion in assets. The deal was said to have been close to completion as long ago as December after senior officials finished preparatory work. The two parent companies have shared a chairman since the appointment in July 2018 of Sinochem’s Ning Gaoning to the same role at ChemChina. Widely known as Frank Ning, he was seen as the driving force behind the plans to combine the companies.

The credit spread on ChemChina’s dollar bonds widened by about 5 basis points across the curve after the report, according to credit traders.

The firms have been focusing on listing various units, including Syngenta, which ChemChina acquired for $43 billion in 2017. Top officials at the company, formally known as China National Chemical Corp., have begun internal work to prepare for a listing of the Swiss pesticide producer as soon as the middle of next year, Bloomberg reported in August. Sinochem, meanwhile, was said to be considering a listing of its oil trading and refining unit.

Bloomberg

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.