China approves merger of 2 state-owned chemical giants

China has approved a merger between the country s top two chemical companies_ paving the way for another supersize state-run enterprise that Beijing hopes will become a dominant global player.

Sinochem Group Co. and China National Chemical Corp._ also known as ChemChina_ will be placed under a new holding company funded and overseen by a government body that holds state enterprises_ according to a Sinochem statement Wednesday. The Chinese body_ called the State-Owned Assets Supervision and Administration Commission controls both enterprises.

The two companies will undertake a joint restructuring_ becoming subsidiaries of a new holding company wholly owned by the SASAC_ read a statement from Sinochem Group.

This joint reorganization will better integrate resources_ build a world-class comprehensive chemical enterprise and promote the high-quality development of China's chemical industry_ said Sinochem Group.

After the reorganization_ the new company will cover fields including life sciences_ material sciences_ the basic chemical industry_ rubber tires and urban operations_ according to Sinochem Group.

The combination_ which has been in the cards for years_ would minimize competition between the two companies and create the world s largest chemicals conglomerate with around 1 trillion yuan in annual revenue_ equivalent to about $153 billion. The new holding-company structure was designed to avoid triggering a U.S. national-security review of Sinochem s ownership of Swiss agro-giant Syngenta AG_ the Journal reported.

Headquartered in Beijing_ Sinochem Group was founded in 1950. It is a leading integrated operator in the oil and chemical industry_ providing agricultural inputs (seeds_ agrochemicals and fertilizers) and modern agricultural services_ and exerting a strong influence on city operation and the non-banking financial services sector.

ChemChina Group is the largest chemical enterprise in China. Based in Beijing_ it has production and research and development bases in 150 countries and regions worldwide_ and boasts a full-fledged marketing network.