Chinese state-owned Sinochem and ChemChina are in merger talks to create the world's biggest industrial chemicals firm, to be headed by Sinochem chief Ning Gaoning, four people with knowledge of the negotiations said.
 
A deal could be announced by the end of the year, the people said, potentially just months after ChemChina completes its own $43 billion purchase of Switzerland's Syngenta (SYNN.S), China's biggest overseas deal to date.
 
A consolidation of Sinochem and ChemChina would be worth around $120 billion, one of the people said, topping companies like industrial chemicals giant BASF (BASFn.DE).
 
Talks to create a Chinese chemicals powerhouse were first reported last year, but were dismissed by both companies as rumor.
 
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