China is planning to merge Sinochem Group (中國中化集團) and China National Chemical Corp (ChemChina, 中國化工) as the government continues its overhaul of state-owned enterprises, according to a person familiar with the matter.
Details of the deal, which would combine two companies with assets of more than US$100 billion, were not immediately clear and the plan is still subject to change, the person said, asking not to be identified because the transaction has not been publicly announced.
The merger would change the landscape of China’s chemicals industry and add to the wave of consolidations the government has pushed under Chinese President Xi Jinping (習近平).
More than US$1 trillion of asset combinations have emerged since late 2014 amid the nation’s biggest shake-up of state enterprises since the 1990s.
“These two are already mega on their own, so combining them would create a super mega,” said Iris Pang, a senior economist for Greater China at Natixis SA in Hong Kong.
A merger could ease competition in the industry and help prices go higher, she said.
It was not clear how the the plan would affect ChemChina, and its proposed acquisition of Syngenta AG for a record US$43 billion.
The Chinese State-Owned Assets Supervision and Administration Commission did not respond to a request for comment.
ChemChina is China’s largest chemical firm with 140,000 employees, according to its Web site.
The company posted a net loss of 828.3 million yuan (US$123 million) last year, while its total assets were worth 372.5 billion yuan.
The state-owned firm, which has businesses in agrochemicals, rubber tires and chemical equipment, has been in a buying spree in recent years. It started its first overseas acquisition a decade ago when it bought France’s Adisseo Group.
After that, it did a series of overseas acquisitions including Elkem in Norway, Pirelli in Italy and KraussMaffei in Germany.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to