SYT Syngenta Ag (delisted)

   (FROM THE WALL STREET JOURNAL 2/5/16) 
   By Brian Spegele in Beijing and Wayne Ma in Hong Kong 

BEIJING -- As he spends tens of billions of dollars to buy European businesses, the chairman of China National Chemical Corp. likes to set himself apart from other chiefs of state-owned Chinese companies, saying he is more interested in performance than politics.

In meetings with reporters and business associates, Ren Jianxin often recalls his entrepreneurial roots: taking a $3,600 loan to found an industrial-cleaning company that grew into a chemicals empire that the government then took over and made him head. "We're 100%-owned by the government," he told journalists last March, "but our path of development has been different."

Just how different Mr. Ren's company is from China's other hulking state-owned enterprises is likely to be an important question for regulators in Europe and the U.S. as they consider his latest bid: a $43 billion offer for Swiss seed giant Syngenta AG. In addition to antitrust reviews, the deal is also subject to scrutiny by the Committee on Foreign Investment in the U.S., or CFIUS, which screens deals for national-security concerns.

The 58-year-old Mr. Ren -- who raised cattle and sheep and tended to wheat and corn fields as a teenager during the Cultural Revolution, but now cuts a determined figure as head of a global conglomerate -- is positioning himself as China's most ambitious global deal maker.

Over the past year before the Syngenta offer, his company, known as ChemChina, agreed to purchase Italian tire maker Pirelli & C. SpA, joined a consortium to buy German equipment maker KraussMaffei Group and took a stake in Mercuria Energy Group, a closely held oil trader.

In pulling off these deals -- and Syngenta would be the largest foreign acquisition by a Chinese company to date -- Mr. Ren keeps ChemChina's interests aligned with the government's. He has tapped into government funds for his acquisition of Pirelli and talked of playing a role in Beijing's new Silk Road initiative to spread Chinese investment across Asia and Europe.

Under his leadership, ChemChina has become one of China's biggest state-owned enterprises, with $45 billion in sales and 140,000 employees. That is nearly three times as many employees as Dow Chemical Co., where sales last year were slightly higher than ChemChina's at $49 billion.

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.

"He's quite different from other executives at state-owned enterprises who define themselves first as government officials," said Pang Guanglian, deputy secretary general of the China Petroleum and Chemical Industry Federation. "He is more of an entrepreneur."

Mr. Ren was ahead of the curve in China in tapping foreign investment and management expertise. In 2007 he sold a 20% stake in a unit of ChemChina to a U.S. 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.

Mr. Pang, who has attended meetings with Mr. Ren, said targeting mature companies with experienced managers is 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 runs 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."

Mr. Ren was Communist Youth League secretary at a state chemicals research institute in his hometown, the western city of Lanzhou, before taking a 10,000 yuan loan -- about $3,600 at the official exchange rate back then -- to launch an industrial-cleaning company in 1984. In an interview with the McKinsey Quarterly in 2008, he said he got the idea after learning that eight million tons of coal a year were being wasted by dirty boilers and he had read about an acidic cleaning agent while at the institute.

In the 1990s, he began a spree of acquisitions to expand BlueStar. He eventually relocated its headquarters to Beijing, where in 2004 his company was absorbed by ChemChina as part of a government-initiated restructuring of China's chemicals industry. Leaders installed him as ChemChina's president.

At ChemChina's headquarters, Mr. Ren frequently eats lunch with employees at the company cafeteria. Inside is a branch of his Malan Noodle Fast Food Chain Store Co., which makes noodles in the style of Mr. Ren's hometown.

In the McKinsey interview, Mr. Ren said he created the chain in a bid to "create jobs for the unfortunate."

Mr. Ren has said he is aware of the risk of opposition in Europe to large-scale Chinese investment.

At a packed news conference Wednesday at Syngenta's headquarters in Basel, Switzerland, Mr. Ren played to his audience. He said he loves Switzerland and saw it as "symbol of peace and quality products."

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Lilian Lin in Beijing and John Revill in Basel, Switzerland, contributed to this article.

(END) Dow Jones Newswires

February 05, 2016 02:47 ET (07:47 GMT)

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