Chinese state-owned Sinochem Group and ChemChina will merge to create a new company, and Sinochem Chairman Ning Gaoning will become the chairman of ChemChina. The merger will create the world’s biggest industrial chemicals firm worth around $120 billion, with units spanning seeds to iron ore trading to oil, at the forefront of the consolidating global agricultural chemicals sector.

ChemChina’s acquisition of Syngenta, completed last year, precipitated negotiations to combine the two Chinese conglomerates. ChemChina could use Sinochem’s more robust balance sheet to help fund the deal, but the domestic merger — if completed while the Syngenta purchase was under way — would have triggered more stringent European regulatory and anti-monopoly reviews because of the size and market share of the merged Chinese entity, according to people familiar with the matter.