Two Chinese companies are plotting a merger to create the world’s largest chemical group.
ChemChina, which is closing in on a $43bn (£33bn) deal to buy Switzerland’s Syngenta, is said to be in talks with Sinochem.
The companies plan to merge next year, according to the Financial Times, creating a group with a turnover of $100bn.
The tie-up has been long-rumoured but denied by company executives.
In January, Sinochem chairman Ning Gaoning dismissed the suggestion, telling a conference: “No, no, it has been a rumour for a long while.”
The merger would be the latest in a series of mega-mergers in the agro-chemical industry.
ChemChina and Syngenta expect to complete their tie-up, first agreed in February 2016, this summer after winning 80 per cent backing from the Swiss company’s shareholders at the end of last week. If completed, this deal would mark China’s largest ever outbound deal.
US companies Dow Chemical and DuPont expect to complete their $130bn merger in August this year. The deal, which was agreed in December 2015, cleared another hurdle last week after winning conditional regulatory approval in China.
The other big deal in the industry, agreed last September, is the acquisition of US seeds company Monsanto by Germany’s Bayer. The companies are aiming to complete the tie-up by the end of the year.
The FT reported that the ChemChina-Sinochem merger would be driven by the nation’s desire to control technology in seeds, herbicides and pesticides to feed its population of 1.4bn. It would also help ensure ChemChina has the financial strength to soak up Syngenta.
ChemChina and Sinochem were asked for comment.