Sinochem International Corp (600500.SS), a unit of state-owned Sinochem Group, said on Monday it has received no information regarding a proposed merger of its parent company with rival ChemChina.
The two state-owned chemical companies are in discussions about a possible merger to create a chemicals, fertilizer and oil giant with almost $100 billion in annual revenue, three sources familiar with the matter told Reuters last week.
“Until now, this company’s controlling company Sinochem Group and controlling shareholder Sinochem Group nor this firm have received any written or oral information from any relevant government department about this rumor,” said Sinochem International in a statement to the Shanghai stock exchange.
Sinochem International trades and distributes rubber, fine chemicals, agrochemicals, and other products. Its shares soared 10 percent on news of the merger talks last week.
The company added that neither it nor Sinochem Group had expressed such an intention to any government department.
“This company currently has no information that should have been disclosed that has not been disclosed,” it added.
The merger has been proposed by China’s central government as part of its efforts to slash the number of state-owned companies and create larger, more competitive global industry players, sources said.
Top management of the two firms are said to have held a meeting last week to discuss the potential merger and both firms have started due diligence work looking into each other’s financial details and business segments, sources said.
The talks come as China National Chemicals Corp, as ChemChina is officially known, finalizes a $43 billion takeover of Swiss pesticides and seed group Syngenta (SYNN.S). That deal would be China’s largest-ever foreign investment.
A ChemChina spokesperson has denied the merger plans.
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Source: Reuters.com