According to sources, Sinochem Group and China Chemical Group will be merged, then China Chemical Group’s acquisition of Syngenta due to funding problems facing enormous possible default risk, therefore, in the investment group will help purchase, or will become Syngenta’s parent company. According to these sources, the relevant program documents have been submitted to the state council.

Although the Asian financial forum in Changning director Gao Ning in January 16th this year, held in Hongkong, the Chinese group does not plan to purchase the Chinese chemical group, but since the reform of the state-owned enterprises, a Sinochem chemical group and combined the rumor has been circulating in the market.

The pace of reform of state-owned enterprises since 2016 significantly accelerated, just one year, there is grain and cotton, Baosteel and Wuhan in 5 of the 10 central enterprises reorganization, the number of the SASAC supervision of enterprises has been reduced to 102.

The pace of overseas acquisitions in recent years, state-owned enterprises is accelerating, the international agricultural giant Syngenta acquired last year chemical group is becoming more Chinese enterprises overseas mergers and acquisitions amount most, reached $43 billion, but the two sides agreed, because if China makes a contract cannot take place, need to take China chemical reverse breakup fee $3 billion.

At present, the deal has been approved by the Foreign Investment Commission and other regulatory agencies related to the review in August 2016, and is expected to get the EU antitrust regulators approved this year, making the industry this transaction will be carried through all procedures is expected to greatly improve the supervision.

In addition to international supervision, funding is also a successful trading “stumbling block”. According to Caixin, the actual total amount of funds needed to be as high as $50 billion 400 million, so Chinese chemical group to build a multi-level financing framework of high leverage, but still need special $15 billion capital injection to start the first SPV, SPV multilayer financing follow-up.

But Sinochem Group and China Chemical Group restructuring means that an annual revenue of nearly $100 billion, the birth of giant companies across the oil industry, chemical fertilizer and the. According to sources, Sinochem has said it will provide financial support for the acquisition of China chemical group Syngenta issue, but it also means that the technology will replace China chemical group, become Syngenta’s parent company.

However, the two largest chemical means the reorganization of state-owned enterprises, or the acquisition of the main transaction structure change. If the move triggered antitrust authorities to review the trading process of the parent company, is the antitrust review process from scratch.