Press Release (ePRNews.com) - SEOUL, South Korea - Nov 04, 2016 - ChemChina and Sinochem Group are said to be in preliminary discussions regarding the proposed tie-up, said the sources although Sinochem’s subsidiary, Sinochem International Corp, said it had no knowledge of the deal.
“As far as we are aware there has yet to be any formal proposal either in written or in oral form related to this rumour either from any government official or from our parent company,” Sinochem International said in a press release yesterday. “We have also not approached any party ourselves regarding a sale or merger.”
Nevertheless, shares in Sinochem International skyrocketed 15 percent last week when the news broke. The company trades agro chemicals, rubber and other related synthetic and raw material products.
It’s thought the merger has been encouraged by the Chinese authorities in its efforts to cut down on the number of state-owned companies in each sector of business in order to create larger firms that are more capable of competing in the global market.
The sources, who preferred to remain unnamed due to the sensitive nature of the discussions, said that top executives from each firm have held meetings to go over early plans for a tie-up and both were investigating each other’s financial health ahead of any firm offers.
“It makes sense for the government to be prodding the big chemical firms to consolidate at this stage,” said Charles Sutton, Director of Investment Management Division at CTI China Renaissance in a phone interview for the BBC. “ChemChina are also in the middle of a potentially huge takeover of Swiss firm Syngenta. We are watching the situation closely and advising our clients to stay risk-off for the moment.” Source :
CTI China Renaissance