Reborn Industrial Tycoon

Chapter 549 Certificate of Surrender

In the 1980s and 1990s, foreign investment in China was mainly based on the establishment of joint ventures.

Foreign capital provides funds and technology, and domestic enterprises provide land, factories, employees, etc. This type of joint venture mainly targets foreign markets. That is, it is produced in China and sold abroad.

After the Asian financial crisis, the Chinese market began to develop and grow. Foreign capital gradually discovered that the Chinese market was really good, so they began to enter China by acquiring domestic companies in order to get a share of the Chinese market.

Before 2004, foreign mergers and acquisitions of Chinese enterprises only accounted for about 5% of foreign investment. In 2004, this increased to 10%. By 2005, mergers and acquisitions accounted for 20% of investment. In 2006, the state-approved

The number of foreign M&A projects reached more than 1,300.

For foreign-funded enterprises, this kind of mergers and acquisitions have allowed them to successfully enter the huge market of China. For China, foreign-funded mergers and acquisitions have also gradually improved domestic technology and led to internationalization.

This kind of foreign-funded mergers and acquisitions also has an obvious duality.

On the one hand, it can improve the quality of China's products, improve asset quality 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 possesses capital, technology, branding, marketing, etc. and occupies high value-added links, which will also squeeze the development space of domestic enterprises. Those enterprises that fail in industrial upgrading will eventually be eliminated by the market.

In the early days of foreign mergers and acquisitions, the conditions offered were very harsh.

For example, in 2006, the American Carlyle Group wanted to acquire XCMG, and its initial offer was US$375 million to acquire 85% of XCMG's equity.

Although XCMG was not the giant enterprise it is now, it was still the leading equipment manufacturing company in China. It wanted to acquire 85% of XCMG's equity for less than US$400 million. It was a joke.

However, the main reason why the Carlyle Group had the confidence to offer such an exorbitant purchase price was because they had the technology.

China trades market for technology. If foreign investors want to get a share of the Chinese market, they should come up with some decent technologies so that they can make money together.

And foreign investors are not fools and cannot give away technology for free. Therefore, when acquiring Chinese companies, they will include the value of technology in the acquisition cost, and there may even be a premium.

For example, if your company is worth one billion, then during the merger and acquisition, I will pay 200 million to buy 80% of your shares, which is an asset of 800 million. This is equivalent to the value of the technology I brought to you is 600 million.

.

Therefore, the forced technology transfer hyped by the West in later generations is completely a lie. Foreign companies invest in China to make money, so how can they give you technology for free?

The so-called transferred technology has already been calculated into the cost when these foreign-funded enterprises enter China.

Although the Heavy Machinery Factory has been suppressed by Fukang Engineering Company in the past two years, it is still a large state-owned enterprise. It has accumulated a lot of financial foundation over the years. There is absolutely no problem in evaluating an asset of 800 million.

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, it wants to spend 250 million yuan to buy something worth 720 million yuan.

The price difference of 470 million is the price of technology.

Volvo's construction machinery technology is top-notch in the world, and any piece of it can be sold for RMB 470 million, so it doesn't seem like a loss.

But the key is that the business belongs to you, and the technology you bring is the production cost that the business should have paid for its operations.

Volvo's acquisition conditions are too harsh. Compared with a white wolf with nothing, it costs only a few dollars more. If it just sells the heavy machinery factory, it is tantamount to selling state-owned assets at a low price. No one can bear this responsibility.

Since then, 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 differences between the two sides are really too big. The city wants 51% of the shares, and the rest is divided between employees and Volvo; Volvo wants 90% of the shares.

With such huge differences, it will take at least dozens of negotiations to reach a consensus, even if each negotiation requires mutual concessions.

Dozens of negotiations, I don’t know how many years they will take. If both parties don’t want to give in, the negotiations will take even longer.

More importantly, as Li Weidong said, Volvo owns 90% of the shares at the word of mouth. How much of the rest can be distributed to employees, and how much of the portion that can be distributed to employees can fall into his own hands?

Calculating it this way, the conditions offered by Li Weidong are really generous. 20% of the shares are given to the management. As the top general manager, 10% of it is not excessive, right? That is equivalent to 2% of the shares of Fukang Engineering.

In contrast, if you continue to stay in the heavy machinery factory and wait for it to be acquired by Volvo, you will probably only be able to get several decimal points of shares, and it will have to be a few years later.

After a long time, Ding Youliang finally sighed, and then said: "Chairman Li, give me some time to think about such a big matter!"

Li Weidong did not expect that Ding Youliang would agree to him immediately. After all, he was the top leader of a state-owned enterprise and would not be easily pried away.

However, Li Weidong is very confident about Ding Youliang joining.

Compared with Fukang Engineering and heavy machinery factory, the biggest difference is the nature of the enterprise.

Fukang Engineering is a private enterprise, and the Heavy Machinery Factory is a state-owned enterprise. This is probably what Ding Youliang values ​​most, and his identity as a state-owned enterprise employee is what Ding Youliang is least willing to give up.

People who came from the era of planned economy often have a kind of attachment and affection for state-owned enterprises. What's more, Ding Youliang is also a dignified factory director, so his feelings for state-owned enterprises are even deeper.

The psychological hurdle for Ding Youliang to change his job at Fukang Engineering Company was probably the most difficult one.

However, Volvo has proposed to acquire heavy machinery factories. In the future, heavy machinery factories will no longer be state-owned enterprises. Even if Ding Youliang stays, he will eventually say goodbye to state-owned enterprises.

Once you lose your status as a state-owned enterprise employee, it will be the same wherever you go.

…

Ding Youliang knew very well that there was no need for Li Weidong to lie to himself about Volvo's acquisition conditions.

But he still didn't believe Li Weidong's words, so he tried to find connections and inquired in many ways, and finally became convinced that what Li Weidong said was true.

Volvo wants to acquire 90% of the shares of the heavy machinery factory, but it is only willing to pay US$30 million. This is hugely different from the city's expectations, and the acquisition negotiations have been suspended. It is not known when they will restart.

As far as personal future development is concerned, going to Fukang Engineering is indeed a better path.

"Li Weidong personally invited me and the conditions he offered were sincere. However, since I was parachuted into Fukang Engineering as an outsider and was the general manager, it was inevitable that some people would be dissatisfied with me.

Even if Li Weidong trusts me, I can't go there empty-handed. I have to have a certificate of nomination. Only in this way can I convince the public when I go to Fukang Engineering. But what kind of certificate of nomination should I present?"

Ding Youliang frowned and started thinking.

At this moment, the cell phone rang, displaying an unusual and unfamiliar number.

Ding Youliang picked up the phone, and a voice rang from the receiver: "Is it Director Ding? I'm Zhang Tao from Fukang Engineering!"

"When did I become a fragrant steamed bun?" Ding Youliang was slightly startled. Li Weidong had just looked for him, so why did Zhang Tao want to look for him too?

Just listen to Zhang Tao continue to say: "Director Ding, do you have time tonight? Let's have a meal together?"

Ding Youliang thought for a moment and agreed. He wanted to see what Ding Youliang's intentions were.

…

After the dinner, Ding Youliang took the car home. Sitting in the car, Ding Youliang began to think:

"This Zhang Tao actually encouraged me to file a complaint. It seems that his situation at Fukang Engineering is indeed very bad. Otherwise, he would not have come to me, a competitor, to sue his company.

But it seems that Zhang Tao didn't know that Li Weidong had already come to me and asked me to take his place at Fukang Engineering, otherwise he would never have encouraged me to file a complaint.

Zhang Tao has reached the point where the seller is seeking glory. It seems that the conflict between him and Li Weidong has indeed reached a very fierce level, and the two parties should be about to break up.

In this case, it was reasonable for Li Weidong to invite me to be the general manager of Fukang Engineering and promised such generous conditions. He needed someone to take over Zhang Tao's position.

I was a little confused before, where did Zhang Tao offend Li Weidong, but now I understand. This guy is eating from Fukang Engineering, but he wants to smash the pot of Fukang Engineering with his backhand. If I were Li Weidong, I would kick him away!"

The next second, Ding Youliang suddenly realized that the petition was coming!

…

In a private room in a certain teahouse, Ding Youliang was tasting fragrant tea and looking at his watch from time to time.

After a while, there was a knock on the door. The waiter opened the door and said, "The guest you were waiting for has arrived."

Li Weidong walked in and sat opposite Ding Youliang. The waiter quickly served Li Weidong tea, then exited the room knowingly and closed the door.

Li Weidong knew that if Ding Youliang chose a place like this to meet him, he would most likely be willing to join Fukang Engineering.

After the two exchanged a few words, Li Weidong asked directly: "Director Ding, what are your thoughts on the things I mentioned before?"

"Chairman Li, I admit that your conditions impressed me, but I also have my own conditions." Ding Youliang said.

"Director Ding, please speak."

Ding Youliang collected 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 keep my word, my reputation is still very good. At least I will not break my promise. I will not lose a penny of the shares I promised."

Li Weidong said.

"I'm not just talking about the shares, but also what you promised before, not to interfere in the management of the company. I want to have absolute decision-making power." Ding Youliang said.

"No problem, I only give suggestions on the development direction of the company, and I don't care about anything else."

Li Weidong continued: "Actually, I don't have that much time to stay at Fukang Engineering. Even when I come back, I just look at various reports. You can just go ahead and do it."

Ding Youliang continued: "The second thing is, I have to bring a group of people there. They are all my old subordinates who have been with me for many years. I can't run away and leave them in the heavy machinery factory. And there is no one I can trust."

People, it’s not easy for me to do my job either.”

Li Weidong thought for a while and replied: "I can accept all management positions and scientific research positions. For ordinary front-line workshops, you have to undergo an assessment and you can only come in after passing the test."

"Don't worry, there are no front-line workshop workers." Ding Youliang said immediately.

Li Weidong continued: "But I can say ugly things first. We are a private enterprise and we do not support idle people. I am very welcome to work at Fukang Engineering, but if you want to provide for retirement, I will not accept it."

"These are all promoted by me personally. The people I employ are all very capable, and no one is just waiting to die." Ding Youliang said.

Li Weidong nodded and then asked: "Is there a third request?"

"No, just these two points." Ding Youliang said simply.

"Is there any problem that I need to solve?" Li Weidong asked next.

"No. I can solve all other problems." Ding Youliang looked very confident, and then said: "In addition, I will submit a letter of nomination to you."

"A certificate of nomination? What is a certificate of nomination?" Li Weidong asked.

"Zhang Tao is my certificate of surrender. He came to have dinner with me last night. He encouraged me to complain to the superiors, saying that by recruiting people from the heavy machinery factory, you are poaching the country's corners. Zhang Tao hopes that the superiors can issue an order to let Li Shouyi, Chen Guofu and others

Come back to the heavy machinery factory."

Ding Youliang said, going through the general situation.

"This Zhang Tao knows how to do such small tricks. How can he not be interested in running a business!" Li Weidong sighed and continued: "Even if no one files a complaint, sooner or later I will have to explain this matter to the city.

If we just poach Li Shouyi, Chen Guofu and the others from the heavy machinery factory, it wouldn't be a big deal. They are just department heads, not high-level.

But it’s different if you poach a great master. As the head of the heavy machinery factory, you were appointed by the city after all. Your level is much higher than theirs. If you invite Fukang Engineering, I need to give an explanation to the city.

."

"It doesn't matter. I can go and talk to them. I just want to find another way out. Anyway, it's nothing new for government and enterprise cadres to go overseas these days. There are many precedents." Ding Youliang said calmly.

"I still have to go there in person to show more sincerity." Li Weidong smiled and continued, "What's more, I want to take this opportunity to recommend your successor!"

"My successor?" Ding Youliang was slightly startled.

"After you leave, a company as big as a heavy machinery factory must be managed by someone, right? The position in this factory cannot be left empty, someone needs to take it," 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, "What I want to recommend is not your certificate of nomination!"

"You mean Zhang Tao?" Ding Youliang was stunned for a moment, then immediately showed an expression of realization.

The update is delivered today. Thank you to all the parents for subscribing. Please give me a guaranteed monthly ticket!