A new twist to China National Chemical Corporation’s takeover of Syngenta AG may have U.S. regulators taking a second look at the record deal.
On Monday, news broke that government-backed ChemChina was considering a possible merger with a second state-owned group, Sinochem. According to Reuters, the merger would bring financial relief to the debt-laden chemicals giant as it seeks to finalize its $43 billion deal with Swiss seeds and pesticides firm Syngenta.
The Committee on Foreign Investment in the United States — an interagency body that reviews business moves for national security concerns — cleared ChemChina’s proposed transaction with Syngenta in August. But ChemChina merging with another major government-controlled corporation may trigger addition review and raise questions regarding the outcome of its deal with Syngenta.
“I would think that CFIUS will take a second review, which they’re capable of doing,” said Bloomberg’s Jeff McCracken on the network’s video channel.
Watch: Bloomberg’s Jeff McCracken discusses ChemChina updates [click to play]
A combination of ChemChina and Sinochem would create a chemicals, fertilizer and oil behemoth with nearly $100 billion in annual revenue, according to Reuters.
The Beijing-headquartered Sinochem was founded in 1950 and is one of China’s four state oil companies. Its core businesses include ventures in energy, agriculture, chemicals, real estate and financial services.
Sinochem’s corporate profile lists the company as China’s biggest fertilizer, seed and agrochemicals company. It also owns more than 300 subsidiaries inside and outside of China.
Sinochem ranked 139th in the 2016 Fortune Global 500.