Back when the Chinese government was encouraging state-owned enterprises and private sector companies to “go out” of the country, few responded as energetically as ChemChina and Ren Jianxin, its entrepreneurial chairman.
In March 2015, the Beijing SOE paid €7.3bn for Pirelli, the Italian tyre company. Less than a year later it agreed to purchase Syngenta, the Swiss agribusiness group, for $44bn. So far, so standard. At a time of relative euro weakness, ChemChina took advantage of the renminbi’s purchasing power to acquire overseas companies with better technology and brand recognition.
It is what often happens after ChemChina buys a foreign target that differentiates its overseas investment strategy from so many of its Chinese peers. In what might be termed a kind of Trojan horse strategy, ChemChina then uses its foreign acquisitions — and foreign managers — to win market share back at home.