China has launched its biggest takeover bid yet, with ChemChina offering $43bn-plus to buy Swiss agribusiness company Syngenta, capping a record start to the year for mainland dealmaking.
ChemChina’s purchase would be by a large margin the biggest foreign purchase by a Chinese company. The record is held at present by Cnooc, the country’s leading offshore oil company. Whether he likes it or not, could soon become the face of the state-directed investment drive along Beijing’s vaunted “New Silk Road” and beyond.
Less than a year earlier, when ChemChina paid €7.3bn for Italian tyremaker Pirelli, it took Mr Ren an entire week to come out of his shell and meet the media at his company’s Beijing headquarters. At that session last March, ChemChina’s founder and chairman came across as calm, confident and reserved. On Wednesday, by contrast, he was positively chummy, slapping journalists on the back as he insisted they help themselves to a buffet laid on at Syngenta’s Basel headquarters.
Mr Ren, a married 57-year-old with a son and one grandson.For a man who grew up in the city of Lanzhou, a former outpost at the eastern end of the old Silk Road, becoming a global dealmaker was an unlikely outcome. Born in 1958, Mr Ren came of age during the madness of Mao Zedong’s Cultural Revolution. Like so many youths of that era, he was “sent down” to the countryside as a teenager — an experience he alluded to on Wednesday. Those formative few years, he said, taught him “what farmers want and how they work the land”.
Many “sent-down youth” never made it back to home, let alone to university, after Mao’s death in 1976 gave the nation a chance to repair itself. Mr Ren managed both feats, graduating from Lanzhou university and joining the ministry of chemical industry.
In 1984, he borrowed Rmb10,000 from the government to start an industrial cleaning company. Over the next two decades, his Bluestar start-up absorbed or merged with more than 100 other SOEs. Before long, he came to be known in official media as the “king of mergers”.
After the group was formally established in 2004, Mr Ren began another acquisition spree, this time overseas, snapping up agribusiness and chemical companies in Australia, France and Israel.
In 2007 he sold a 20 per cent stake in a unit of ChemChina to a US private-equity firm, the Blackstone Group. Two Blackstone executives joined the unit’s board and assisted the company with financial and strategic planning. Earlier this year, ChemChina hired a former Bayer executive to run the ChemChina unit, China National BlueStar, a rare foreign head for a state-owned company.
He has assembled a team of foreign consiglieres including Michael Koenig, a former Bayer AG director, and Ze’ev Goldberg, a former Israeli military officer and Lehman Brothers banker who advised ChemChina on the Pirelli and Syngenta deals.
Part of Mr Ren’s tried and tested pitch, to foreign politicians and acquisition targets alike, is that the group’s overseas units will retain operational independence.
Mr Pang, who has attended meetings with Mr Ren, said targeting mature companies with experienced managers was a way to enhance ChemChina’s brand and expand its sales channels. Mr Ren’s offer for Syngenta keeps the company in Switzerland and its management intact.
Tyler Rooker, assistant professor of Chinese business at the University of Nottingham, said Mr Ren ran his overseas businesses through monitoring and budgeting rather than through interference. “They’re willing to keep the management on,” said Mr Rooker, who has studied the overseas acquisitions of Chinese state companies. “This is very patient capital.”
Given to wearing black trousers and open-collar shirts instead of suits, Mr Ren is driven by a vision that acquisitions can transform ChemChina, helping it catch up with international rivals and become a creator of leading-edge chemical products, according to people familiar with him.
石油圈
