BEIJING (Reuters) - Chinese state-owned Sinochem Group [SASADA.UL] and ChemChina will merge to create a new company, and Sinochem Chairman Ning Gaoning will become the chairman of ChemChina, financial publication Caixin reported late on Saturday.

FILE PHOTO: The company logo of China National Chemical Corp, or ChemChina, is seen at its headquarters in Beijing, China February 3, 2017. REUTERS/Thomas Peter/File Photo

Reuters has reported that the two companies were in merger talks to create the world’s biggest industrial chemicals firm worth around $120 billion, to be led by the head of Sinochem.

Sinochem Chairman Ning will serve as Chairman and Party Secretary of ChemChina, while ChemChina’s long-serving Chairman Ren Jianxin retires, Caixin reported, citing sources close to the companies.

The personnel change was announced on Saturday at ChemChina’s office by officials from State-owned Asset Supervision and Administration Commission and the Ministry of Organization, the report said.

“However, there is no definite plan for how to form a new company,” the publication said.

A Sinochem spokesman declined to comment on the personnel changes, or the possible merger of the companies.

A ChemChina media official did not respond to a request for comment.

Talks to create a Chinese chemicals powerhouse were first reported in late 2016, but were dismissed by both companies as rumor.

Reuters reported that the two companies accelerated negotiations around May last year, after regulators cleared ChemChina’s $43 billion acquisition of Swiss pesticides and seeds group Syngenta.

Beijing sees a Sinochem and ChemChina deal as a blueprint for streamlining and consolidating its sprawling, debt-heavy state-owned enterprises, leaving fewer, but more powerful, national champions.