The Chinese soil is going to witness a massive collaboration of chemical and oil giants in the coming weeks. China National Chemical Corporation aka Chemchina is to be merged with Sinochem. Top executives sorted out the legal issues of a collaboration of the two industrial giants which took around two years. The Chinese authorities have given a preliminary nod for the merger.
Chemchina occupies the 211th rank in Fortune Global companies. Chinese state-controlled Chemchina has diversified business in various chemical products. The products covered are Rubber products, agrochemicals, oil processing, and refining products, chemical materials, chemical equipment, and specialty chemicals. The annual revenue from the company was estimated CN¥300.127 billion as of 2016. The Company grew from a small solvent factory to a big giant through acquisition and mergers.
The state-owned assets supervision and administration commission of the state council is the controlling authority of Sinochem. Sinochem has established its foothold in petrochemical, petroleum and fertilizer industry. The Beijing headquartered company ranks 139th in the Fortune Global companies. It owns a lot of subsidiaries inside and outside China. This conglomerate is the largest trading company in China.
More than $ 100 billion of assets will be unveiled in this merger. Chemchina has a debt of $43billion by closing the deal of purchasing Swiss pesticide manufacturer Syngenta AG. Sinochem had considered selling its share from various businesses. The subsidiary companies shares listed under this merger rose at the Shanghai stock exchange. The merger will help chemchina overcome this debt.
Impact of the merger:
The Chinese chemical industry will undergo a major change in the coming years. The combined company will now enjoy a large customer base. It is mutually helpful for chemchina and Sinochem. Their business will grow. The competition will intensify for the Chinese rivals. The distributors and dealers will have to sell all the products from both companies. They have to handle more financial, marketing and sales.