China's "king of mergers and acquisitions" Ren Jianxin was dismissed

Gu Ziming said

2024-05-13 11:11Published in Liaoning Finance and Economics Creator

China's "king of mergers and acquisitions" has fallen from the altar.

On May 11, the Central Commission for Discipline Inspection officially announced that Ren Jianxin, the former chairman of Sinochem, and Yang Xingqiang, the former general manager, were suspected of serious violations of discipline and law and were subject to review and investigation.

Yang Xingqiang is Ren Jianxin's right-hand man, and he is also the "shadow" of Chairman Ren's retirement to preside over his work, and the two have controlled Sinochem for nearly 20 years.

This time, the two of them officially announced their fall together, marking a big net that is slowly tightening.....

It is said that Ren Jianxin, a northwestern man born in Lanzhou, is one of the most legendary bigwigs in China's business world.

At the age of 26, he borrowed money from the unit to buy out a chemical cleaning technology, founded the private company "Blue Star", and became a listed company all the way, with the help of the opportunity of state-owned enterprise restructuring at the end of the 90s, more than 100 state-owned chemical enterprises were acquired.

In 2003, the State Council established the State-owned Assets Supervision and Administration Commission (SASAC) and set up a national team of large central enterprises.

In the document No. 115 of the State Letter [2003], it is written as follows: China National Chemical Corporation is a newly established large state-owned enterprise on the basis of the reorganization of China Bluestar (Group) Corporation and China Haohua Chemical (Group) Corporation.

Since then, Sinochem has become the only central enterprise established on the basis of private enterprises, and Ren Jianxin has also changed from the boss of a private enterprise to the general manager of a central enterprise.

Under Ren Jianxin's leadership, Sinochem not only became the first state-owned enterprise to introduce foreign strategic investors, but also became the first pioneer in China's overseas mergers and acquisitions.

From hundreds of millions of euros in France's Adisseo, Australia's Kenos, to billions of euros in France's Rhodia, Israel's Forrest Gump, Norway's REC, Norway's Elkem, Italy's Pirelli, Germany's KraussMaffei, Switzerland's Mercuria......

No Chinese company is as keen on acquiring overseas assets and throwing money around as Sinochem.

With the continuous acquisition of global industrial giants and the increasing sky-high debt, Ren Jianxin also sent Sinochem to the world's top 500.

In the end, Ren Jianxin, who was hailed by foreign media as China's "king of mergers and acquisitions", pointed his final battle before retirement to the global seed giant Syngenta.

That year, 2015, was also a turning point in the fate of many people,

That year, A-shares once broke through 5,000 points.

That year, Wang Jianlin went on a frenzy of mergers and acquisitions overseas, planning to delist Wanda from the Hong Kong stock market and return to the A-share market.

That year, Xu Jiayin frantically acquired land in the third and fifth lines, planning to delist Evergrande from the Hong Kong stock market and return to the A-share market through backdoor.

That year, Ren Jianxin also embarked on a frantic M&A journey, beating the Americans at a price that the Swiss could not refuse, and planned to delist Syngenta and bring it back to the A-share market.

In order to facilitate the deal of the century, Ren Jianxin not only took matters into his own hands, but also privately signed a sky-high liquidated damages of $3 billion with the Swiss side, and also leveraged $50 billion from the global capital market with a principal of $5 billion.

At that time, Sinochem was one of the state-owned enterprises with the worst financial indicators under the SASAC, and the snake-swallowing acquisition had to bear huge risks and capital costs.

Ren Jianxin's "sick sheep theory" and ultra-high premium acquisitions are also contrary to the supply-side reform proposed by authoritative figures.

Even Syngenta's profits simply cannot meet the price-to-earnings ratio listing requirements of A-shares.

Under the background at that time, the acquisition led by Ren Jianxin was destined to poke a big basket.

But just like the sudden interruption of the homeowner's non-speculation, it gave Wang Jianlin and Xu Jiayin a short respite, and the sudden fate of the storm suddenly pulled Ren Jianxin and his Syngenta.

In 2018, Trump started a trade war and a technology war, and seeds became the "chips" of agriculture.

In 2019, the science and technology innovation version was born, which solved the crisis of Zhengda's insufficient price-earnings ratio and inability to go public.

In 2020, when the new crown epidemic broke out, the global supply chain was impacted, and seeds became a lifeline.

In 2021, Russia and Ukraine, the global granary, are heating up, and the world is facing a food supply crisis.

Originally, if Syngenta had completed its IPO and eased the pressure on cash flow, Ren Jianxin might have the opportunity to land safely as the father of "Syngenta".

But just like the brother companies in Zhejiang next door, which are also lining up for the science and technology innovation version, Sinochem also encountered force majeure.

In 2021, the Sinochem refined oil tax evasion case broke out, triggering the anger of Shangfeng, and carrying out a large-scale cleanup of local refining in Shandong, Liaoning and other places, which also triggered the fall of many senior executives of Sinochem, and Yang Xingqiang also had to leave Sinochem.

At that time, it was the best event for China Syngenta's listing, and the tax evasion case directly caused Sinochem to lose the special approval of the State Council, and it could only wait until June 2022, when it had been in operation for three years, in accordance with regulations.

And after June '22, due to well-known reasons, the market was miserable, and the giant Syngenta had to be put on hold, and then had to move to the main board.

But at that time, the dollar entered a cycle of interest rate hikes, and the risk-free rate of U.S. bonds had risen to more than 5%, and the interest of $50 billion borrowed by Ren Jianxin had turned Syngenta's shareholder profits into a negative number, and Syngenta was no longer eligible for an IPO.

The house leak happened to rain overnight, and as China reopened in 2023, Syngenta's rivals also began to knock on the door again.

German Chancellor Olaf Scholz's visit to China was the first company to be Syngenta's sworn rival in Europe, BASF, which has also been unbeatable in terms of investment in German companies in China in recent years.

The French president welcomed China's visit, and the two sides signed a series of agricultural import and cooperation agreements, and even the slogan of the cooperation between the two sides is "From French farms to Chinese tables".

For the first time in recent years, the just-concluded 430 meeting did not focus on agriculture and food issues.

When heaven and earth come together, the heroes are not free,

In the end, Ren Jianxin ended up with Wang Jianlin and Xu Jiayin, who gambled together in the same period.

It's just that the direct trigger for Ren Jianxin's fall this time was not the $50 billion Syngenta, but a 3 billion yuan illegal guarantee from a local government in Gansu.

View original image 639K

• 

Personal opinion, for reference only