Rebirth of the Industrial Tycoon - Vol 2 Chapter 549
Chapter 549 Voting Certificate
In the 1980s and 1990s, foreign investment in China was mainly based on the establishment of joint ventures.
Foreign funds provide capital and technology, while domestic enterprises provide land, factory buildings, employees, etc. This type of joint venture is mainly aimed at foreign markets. It is produced in China and sold abroad.
After the Asian financial crisis, the Chinese market began to grow, and foreign investors gradually discovered that the Chinese market was really fragrant, so they began to enter China through mergers and acquisitions of domestic companies in order to get a share of the Chinese market.
Before 2004, foreign mergers and acquisitions of Chinese companies accounted for only 5% of foreign investment. In 2004, it rose to 10%. By 2005, the proportion of mergers and acquisitions in investment had reached 20%. In 2006, the state approved There are more than 1,300 foreign M&A projects.
For foreign companies, such mergers and acquisitions have allowed them to successfully enter the huge market of China, while for China, foreign mergers and acquisitions have gradually improved domestic technology and thus moved towards internationalization.
This kind of foreign mergers and acquisitions also has obvious duality.
On the one hand, it can improve the quality of Chinese products, improve the quality of assets to a certain extent, and enhance the industrial structure. When the overall industry is upgraded, it can compete in the international market.
On the other hand, foreign capital has capital, technology, brand, marketing, etc. It occupies high value-added links and will also squeeze the development space of domestic enterprises. Those enterprises that fail to upgrade their industries will inevitably be eliminated by the market.
In the early stage of foreign mergers and acquisitions, the conditions were very demanding.
For example, in 2006, the Carlyle Consortium of the United States hoped to acquire XCMG. The initial condition was 375 million U.S. dollars to acquire 85% of XCMG.
At that time, XCMG was not a giant company like the one it is now, but it was also the leader of China’s equipment manufacturing enterprises. With less than 400 million U.S. dollars, it wanted to acquire 85% of XCMG’s shares. It was a joke.
However, the main reason why the Carlyle Consortium has the confidence to offer such an excessive purchase price is because they have the technology.
China trades the market for technology. If foreign investors want to get a share of the Chinese market, they should always come up with some decent technology so that they can make money together.
And foreign capital is not a fool, and it is impossible to give away technology for nothing. Therefore, when acquiring Chinese companies, the value of technology will be included in the cost of mergers and acquisitions, and there will even be a premium.
For example, if your company is worth one billion, then during mergers and acquisitions, I will pay 200 million and buy 80% of your shares, which is 800 million in assets. This is equivalent to the technology value of six billion that I brought.
So the forced technology transfer hyped by the West in later generations is completely a lie. Foreign companies invest in China to make money. How can they give you technology for nothing?
The so-called transferred technology has been calculated into the cost when these foreign-funded enterprises enter China.
Although Heavy Machinery Factory has been suppressed and beaten by Beverly Engineering Company in the past two years, it is a large state-owned enterprise.
However, Volvo is only willing to pay 30 million US dollars, which is about 250 million yuan, to acquire 90% of the shares of the heavy machinery factory. In other words, I want to spend 250 million to buy something worth 720 million.
The 470 million difference in the middle is the price of technology.
Volvo’s construction machinery technology is the world’s top, and it can sell for 470 million yuan at any point, so it seems that it is not a loss.
But the key is that the company is yours. The technology you bring is the production cost that the company should have paid.
Volvo’s acquisition conditions are too harsh. Compared with the empty glove white wolf, it will not cost a few more money. If the heavy machinery factory is sold in this way, it is tantamount to selling state-owned assets at a low price. No one can bear this responsibility. Therefore, the city will definitely not agree to Volvo’s acquisition plan.
So when Li Weidong put the city’s acquisition plan and Volvo’s acquisition plan on the table at the same time, Ding Youliang instantly realized that the acquisition work would not be completed for a while!
The difference between the two parties is too great. The city wants to take 51% of the shares, and the rest is for employees and Volvo; Volvo wants 90% of the shares.
This kind of huge disagreement, even if it is to negotiate a step with each other, it will take at least dozens of negotiations to reach a consensus.
Dozens of negotiations, I don’t know how many years to talk. In case the two parties do not want to make concessions, the negotiation time will be longer.
More importantly, as Li Weidong said, Volvo’s mouth is 90% of the shares. How much of the rest can be distributed to employees, and how much of the part that can be distributed to employees can fall into his own hands?
Thus, Li Weidong’s conditions are really good. 20% of the shares are given to the management. As the top general manager, 10% of it is not too much, right? That is equivalent to a 2% stake in Beverly Engineering.
In contrast, if you continue to stay in the heavy machinery factory waiting to be acquired by Volvo, you can probably only get a few decimal places of shares, and it will be a few years later.
After a long time, Ding Youliang finally sighed, and then said: “Chairman Li, give me some time for such a big thing, let me think about it again!”
Li Weidong also did not expect Ding Youliang to immediately agree to him. Somehow he is the head of a state-owned enterprise, and it is not so easy to be pryed away.
However, Li Weidong is very confident about Ding Youliang’s joining.
The biggest difference between Fukang Engineering and Heavy Machinery Plant is the nature of the enterprise.
The Beverly Project is a private enterprise, and the heavy machinery factory is a state-owned enterprise. This is probably what Ding Youliang values most. The status of a state-owned enterprise employee is also the last thing Ding Youliang is willing to give up.
People who have come from the planned economy era often have a kind of attachment and affection to state-owned enterprises, not to mention that Ding Youliang is still a dignified factory director, and his feelings for state-owned enterprises are even deeper.
For Ding Youliang to quit Fukang Engineering Company, the psychological barrier is probably the most sad threshold.
However, Volvo has already proposed to acquire a heavy machinery plant, and the future heavy machinery plant will no longer be a state-owned enterprise. Even if Ding Youliang stays, he will eventually say goodbye to the state-owned enterprise.
I lost my status as an employee of a state-owned enterprise. It’s the same everywhere I go.
…
Ding Youliang knows very well that Li Weidong has no need to lie to himself regarding Volvo’s acquisition conditions.
But he still didn’t believe Li Weidong’s one-sided words, so he had something to do with it, and after inquiring about it, he was finally convinced that what Li Weidong said was true.
Volvo wants to acquire 90% of the shares in the heavy machinery factory, but is only willing to pay 30 million US dollars. This is very different from the city’s expectations. The acquisition negotiations have also been suspended. I don’t know when and when it will restart.
In terms of personal future development, going to the Beverly Project is indeed a better way.
“Li Weidong came to invite me personally. The conditions offered were full of sincerity, but I was an outsider who was parachuted to the Beverly Project and was still the general manager, so some people would inevitably be unconvinced with me.
Even if Li Weidong trusts me, I can’t go there empty-handed. I have to have a certificate of submission. Only then can I go to the Fukang Project to convince the public. But what kind of voting certificate should I offer! ”
Ding Youliang frowned and thought.
At this moment, the phone rang, showing an uncommon and unfamiliar number.
Ding Youliang picked up the phone, and a voice rang from the receiver: “Is it Director Ding? This is Zhang Tao from Beverly Engineering!”
“When did I become a steamed bun!” Ding Youliang was taken aback for a moment. Li Weidong had just looked for himself, so why did Zhang Tao also look for himself?
Just listen to Zhang Tao continuing to say: “Director Ding, do you have time tonight? Let’s have a meal together?”
Ding Youliang thought for a while, then agreed, he wanted to see what Ding Youliang’s intentions were.
…
After the meal, Ding Youliang drove home. Sitting in the car, Ding Youliang began to think:
“This Zhang Tao even urged me to file a complaint. It seems that his situation at Beverly Engineering is really bad. Otherwise, he won’t come to my competitor to sue his company.
But it seems that Zhang Tao didn’t know that Li Weidong had come to me, and asked me to go to Fukang Engineering to replace him, otherwise he would never encourage me to file a complaint.
Zhang Tao has reached the point where the seller is seeking glory. It seems that the contradiction between him and Li Weidong has indeed reached a very fierce point, and the two sides should be torn apart.
In this case, Li Weidong invited me to become the general manager of Beverly Engineering, and he promised such generous terms, which is a reasonable thing. He needs someone to replace Zhang Tao.
I was a little puzzled before, where exactly Zhang Tao offended Li Weidong, now I understand it. This guy is eating the food of the Beverly Project, but backhanded he wants to smash the pot of the Beverly Project. If I were Li Weidong, I would also kick him away! ”
In the next second, Ding Youliang suddenly realized that the vote was coming!
…
In a single room of a teahouse, Ding Youliang was tasting fragrant tea and looked at his watch from time to time.
A moment later, there was a knock on the door, and the waiter opened the door and said, “The guests you are waiting for are here.”
I saw Li Weidong walk in and sat opposite Ding Youliang. The waiter quickly served Li Weidong tea, then quit the room with interest and closed the door.
Li Weidong knows that Ding Youliang chooses this kind of place to see himself, and he is willing to join the Beverly Project.
After the two exchanged a few words, Li Weidong directly asked: “Director Ding, what I mentioned before, don’t you know how you are thinking about it?”
“Chairman Li, I admit that your conditions touched me, but I also have my conditions.” Ding Youliang said.
“Director Ding, please speak.”
Ding Youliang sorted out his thoughts, and then said; “First, I hope Chairman Li’s promise can be fulfilled.”
“You can rest assured in this regard. Although I, Li Weidong, dare not say that I am eloquent, I am still very good in terms of credibility. At least I will not break my promise for the things I have promised. The shares promised will not be less.” Li Weidong said.
“I’m not only talking about shares, but also what you promised before, not to intervene in the operation of the enterprise. I must have absolute decision-making power.” Ding Youliang said.
“No problem, I only give suggestions on the direction of the company’s development, and I don’t care about everything else.”
Li Weidong continued: “Actually, I don’t have so much time to stay at the Beverly Project. Even when I come back, I just look at various reports. You can just go ahead and do it.”
Ding Youliang went on to say: “The second thing, I have to take a group of people over. They are all old men who have been with me for many years. I can’t run away by myself and leave them in the heavy machinery factory. And there is nothing I can trust. People, I’m not good at work.”
Li Weidong thought for a while, then replied: “I can come in for management positions and scientific research positions. For ordinary first-line workshops, they have to be assessed and can only come in after they are qualified.”
“Don’t worry, there are no first-line workshop workers.” Ding Youliang said immediately.
Li Weidong continued; “But I can say that the shame is ahead. We are a private enterprise and we don’t support idlers. I am very welcome to work in Beverly Engineering, but if I want to come to the elderly, I will not accept it.”
“These are all promoted by me personally. The people I use are the most capable, and no one is eating and waiting to die.” Ding Youliang said.
Li Weidong nodded, and then asked, “Is there any third requirement?”
“No, just two points.” Ding Youliang said simply.
“Is there any problem, do I need to solve it?” Li Weidong asked.
“Neither. I can solve all other problems.” Ding Youliang showed a very confident look, and then said: “In addition, I will submit a letter of submission to you.”
“Vote for name certificate? What to vote for name certificate?” Li Weidong asked.
“Zhang Tao is my name certificate. He asked me to have dinner last night. He urged me to find a complaint, saying that you were digging people from the heavy machinery factory. It was digging the corner of the country. Zhang Tao hoped that they could give orders to Li Shouyi, Chen Guofu and others. Come back to the heavy machinery factory.”
Ding Youliang said, explaining the general situation again.
“Zhang Tao, he knows how to engage in such small actions. Why don’t you run a business?” Li Weidong sighed, and then said: “Even if no one is going to file a complaint, sooner or later I will have to explain this matter to the city.
If Li Shouyi and Chen Guofu were just poached from the heavy machinery factory, it would not be a big deal. They are just department heads, not high-level.
It’s different if you can poach you with a great god. As the head of the heavy machinery factory, after all, you are appointed by the city. Your level is much higher than them. Please come to Beverly Engineering. I need to give an explanation to the city. ”
“It doesn’t matter, I can talk to the above, saying that I want to find another way out. Anyway, it is nothing new for government and enterprise cadres to go to the sea these days. There have been many precedents.” Ding Youliang said calmly.
“I still have to go there in person to appear more sincere.” Li Weidong smiled, and then said; “What’s more, I would like to take this opportunity to recommend your successor!”
“My successor?” Ding Youliang was taken aback.
“After you leave, a company as large as the Heavy Machinery Factory must be managed by someone, right? The location of this factory can’t be vacant, someone needs to sit there.” Li Weidong said.
“Then who are you going to recommend?” Ding Youliang asked puzzledly.
Li Weidong showed a deep smile and said at the same time; “I want to recommend it, but it’s not your name certificate!”
“Are you talking about Zhang Tao?” Ding Youliang was taken aback for a moment, and he immediately showed a suddenly realized expression.
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(End of this chapter)