Ren Jianxin, the former chairman of ChemChina, was investigated, and Syngenta, which led the acquisition in the past, failed to go public

Blue Whale Finance

2024-05-11 20:56Posted on the official account of Beijing Blue Whale Finance

Image source: Visual China

Blue Whale financial reporter Wang Xiaonan

On May 11, according to the website of the Central Commission for Discipline Inspection and the State Supervision Commission, Ren Jianxin, former secretary of the Party Committee and chairman of China National Chemical Corporation, and Yang Xingqiang, former deputy secretary of the Party committee and general manager, are suspected of serious violations of discipline and law.

According to the official website, China National Chemical Corporation (hereinafter referred to as "ChemChina") is a state-owned enterprise established on the basis of the former Ministry of Chemical Industry, ranking 161st in the world's top 500, with 145,000 employees, 87,000 employees located outside China. Headquartered in Beijing, CNNC has production and R&D bases in 150 countries and regions around the world, as well as a complete marketing network system.

At present, China's chemical business includes six business segments: new chemical materials and specialty chemicals, agricultural chemicals, petroleum processing and refining products, rubber tires, chemical equipment, and scientific research and design. It has 11 listed companies such as Adisseo, Shenyang Chemical, Cangzhou Dahua and Haohua Technology.

In 2004, Bluestar merged with Haohua and Huashen, the former enterprises of the Ministry of Chemical Industry, to establish ChemChina, and the position of general manager was held by Ren Jianxin.

Since then, ChemChina has sought leapfrog development through mergers and acquisitions.

In 2006, ChemChina completed the acquisition of Adisseo, the world's second largest methionine company, and at the same time purchased Kenos, Australia's largest polyethylene producer, and took over the silicone and sulfide business of Rhodia in France. In 2011, ChemChina successively won the world's seventh largest pesticide manufacturer, Adama, Israel, and Elkem, a century-old chemical company in Norway. In 2015, ChemChina acquired Italy's Pirelli, the world's fifth-largest tire maker. In 2016, it spent another 925 million euros to acquire KraussMaffei, a German manufacturer of rubber and plastic chemical machinery.

ChemChina's aggressive acquisition of Syngenta has raised eyebrows.

In February 2016, ChemChina announced the acquisition of Syngenta, a global agrochemical and seed giant, in a deal of up to US$43 billion.

In August 2017, the National Development and Reform Commission, the Ministry of Commerce, the People's Bank of China and the Ministry of Foreign Affairs issued the Guiding Opinions on Further Guiding and Regulating the Direction of Overseas Investment. In June of the same year, ChemChina completed the second closing of the merger and acquisition of Syngenta of Switzerland, and Ren Jianxin became the chairman of the board of directors of Syngenta of Switzerland.

In January 2018, Syngenta was delisted from the SIX Swiss Exchange and the New York Stock Exchange. In July of the same year, the State-owned Assets Supervision and Administration Commission of the State Council dismissed Ren Jianxin as chairman and director of China National Chemical Corporation, and Ren Jianxin, who had just turned 60, retired.

On March 29 this year, Syngenta's main board IPO application was terminated, and its fundraising amount of up to 65 billion yuan has attracted much attention.

Syngenta's IPO application was accepted in June 2021, and its RMB65 billion raised was the largest since its establishment. On the eve of the meeting on March 28, 2023, the Shanghai Stock Exchange announced that it would cancel the Syngenta IPO review meeting, and on May 18 of the same year, Syngenta said that the company decided to withdraw its application for listing on the Science and Technology Innovation Board and submit an application for listing on the main board of the Shanghai Stock Exchange.

Syngenta was registered in Shanghai in 2019 and is mainly composed of the agricultural businesses of Syngenta, ADAMA and Sinochem Group, and currently covers the research and development, production and sales of plant protection, seeds, crop nutrition products, and modern agricultural services.

From 2021 to 2023, Syngenta's operating revenue will be 181.751 billion yuan, 224.845 billion yuan and 226.875 billion yuan, and its net profit will be 7.987 billion yuan, 11.406 billion yuan and 895 million yuan, respectively. In the first quarter of this year, Syngenta's performance declined, with the company's revenue of 52.211 billion yuan, down 17.3% year-on-year; net profit was 1.634 billion yuan, down 70% year-on-year.

When ChemChina acquired Syngenta of Switzerland for US$43 billion, making it the largest overseas acquisition by a Chinese company, it also brought Syngenta a huge amount of loans to raise multiple financings through its overseas special purpose vehicles (SPVs), including borrowings from related parties, syndicated loans, and equity instruments such as perpetual bonds and preferred shares. As of the first quarter of 2024, Syngenta's short-term borrowings were RMB55.735 billion, notes payable and accounts payable were RMB56.286 billion, long-term borrowings amounted to RMB100.475 billion, while monetary funds were only RMB33.225 billion.

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