Chapter 718 Railway Group
The British Railway Steamship Company that Barron is interested in has a long history.
P&O was founded in 1822.
They also have a large amount of business in Asia - on December 31, 1840, the Peninsula Oriental Steamship Company was established in London with a capital of 1 million pounds. With the pace of colonial conquest, the railway business also spread to Egypt, India and even Lijiapo and Hong Kong.
The full name of P&O Group (P&O) is Peninsular and Oriental Steam Navigation Company, literally translated as Peninsula Oriental Steam Navigation Company.
From the beginning, the railway company had a near monopoly on Hong Kong's early external shipping business: at the end of the 19th century, the railway company used HK as its regional headquarters for its Far East business, and set up a branch in the Western District of Hong Kong. In addition to an office building, it also had a private dock.
The Chinese name "Tie Xing" came from the fact that when the HK company was established, the company's Taipan (comprador) could not think of a Chinese name that could properly convey the meaning of "Peninsula Oriental". Looking out on the terrace He casually picked up the word "tiehang" when he saw the iron railings, and the name has been used to this day.
In 1971, Tiehang Group was reorganized into five major business divisions: shipping, truck freight, passenger transportation, European and air transport business, and general holding business.
Then Tiehang Group merged with Carnival Group in 2002, involving an amount of US$5.4 billion.
After the transaction is completed, Carnival will hold 74% of the shares of the new company formed after the merger, while Tiexing will hold 26% of the shares.
The two major companies joined forces and immediately created a "Big Mac" in the global cruise market. After the acquisition, Carnival included almost all well-known cruise brands, and the number of cruise ships it owned increased to 73, accounting for a total value of US$11 billion. Nearly 40% share of the global cruise market.
Before being acquired by Dubai World Group, Railway Shipping Company owned 29 container terminals in more than 100 terminals in 18 countries around the world, and has become the world's leading terminal operator.
This includes many of China’s terminal projects they have invested in. For example, on July 21, 2003, China Railway Group, Maersk Group, COSCO Group and Qindao Port Group jointly invested in Qindao. Port Qianwan Container Terminal Joint Venture Project.
In the reorganized Qindao Port Qianwan Container Terminal Co., Ltd., the total investment is US$887 million, of which Tiexing Group holds 29%, Maersk Group 20%, COSCO Group 20%, and Qindao Port Group 31%.
In the British mainland, the Railway Shipping Company's railway shipping company has a total of 32 passenger ships traveling between Britain and European coastal countries every day.
Tiehang Cold Storage Logistics is the world's largest temperature-controlled logistics provider.
China Railway Group’s 50:50 joint venture with China Railway Group is the second largest container freight company in the world. It has more than 70 fixed routes and connects 230 ports in 120 countries. It has its own Or rent 147 ships.
Five years ago, in 2004, Dubai World Group defeated its rival Lijiapo Port Group and acquired the British Railway Group for US$6.8 billion. This made Dubai World Group the largest terminal operator in the world. The position immediately jumped from seventh to third.
Before Dubai World Group, they are HK Hutchison Group and Lijiapo Port Group.
With the addition of British Rail Line's 29 container terminals around the world, DP World's global container terminals have also increased to 51, and its container throughput has also increased to 33.3 million TEUs.
However, Dubai World Group, which is facing debt default, now has to obtain funds by selling their assets to avoid the situation from deteriorating.
So when Global Industrial Investment Fund (GII) CEO Finn Hudson went to Dubai and proposed to acquire the British Railway Group, they also showed a positive attitude towards it. "The acquisition price we are currently proposing is US$6 billion, but Dubai World Group has expressed that it is difficult to accept such a price. They hope to sell the Railway Group for at least US$6.8 billion, the price they originally acquired."
Finn Hudson said this:
“But I think if we insist, then it is very likely that they will eventually compromise. After all, so far, Dubai World Group has The investment projects have all experienced very large market value declines. In comparison, Tiehang Group has maintained its value..."
“In addition to price factors, we also need to consider whether the Railway Group will be affected by the delay. After all, although Dubai is eager to solve the current crisis, if it takes too long, it will not matter to us. Good thing.”
Although it was said that it was Byworld Group is the British Railway Group acquired for US$6.8 billion. However, affected by the subprime mortgage crisis, not only the market value of many companies has been greatly reduced, but also the global port shipping business has entered a downward cycle due to the economic recession. Therefore, appropriate price reduction is considered normal.
But Barron also knows that if Dubai World Group prepares to sell the Railway Group, the GII Fund is not without competitors. For example, when Dubai World Group acquired the British Railway Group, it had They bid for Lijiapo Port Group.
As the second largest port group in the world, if it can merge with the Railway Group, then the Lijiapo Port Group will be able to surpass the HK Hutchison Group and take the top spot. This is also quite tempting for them. of.
What's more, after acquiring the Railway Group, Barron still has many things to solve.
For example, before Dubai World Group acquired British Railways, the Railways Group owned six container ports in the United States, located in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.
But during the process of this transaction, the United States has not passed the review of this transaction.
The reason is that a considerable number of American lawmakers at that time believed that the United Arab Emirates, a country related to the 9/11 hijackers, would threaten its national security by operating American ports.
Since the "9·11" incident, the United States has regarded airport and port security as the "top priority" of homeland security. In January 2002, it proposed the "Container Security Initiative" and regarded it as An important part of the United States' global counter-terrorism strategy deployment, it aims to prevent terrorist organizations or terrorists from using the weak links of container freight to attack the United States.
They believe that if Middle Eastern companies control the six major ports in the United States, the so-called container security issues will make the U.S. security department even more worried.
Although George W. Bush at the time was trying hard to promote this deal, in the end after a long review, Dubai World Group made a compromise and handed over the operation of six container ports in the United States to relevant American agencies. was able to complete this transaction.
If GII Fund can complete this acquisition, then with the same British capital background as GII Fund, it will naturally be able to get back the operating rights of these six container ports in the United States.
So after comprehensive consideration, Barron still asked Finn Hudson to make appropriate compromises on the price to speed up the time for their deal to be concluded.
It can be said that many of Barron's businesses currently rely on shipping, such as United Petroleum Group's petrochemical products and natural gas, such as Argos Retail Group's products, such as British Automotive Group, etc., so the acquisition of iron and steel The bank group is still very important for his future layout.
And it’s not just the Railway Group. You must know that Greece itself is also a major shipping country. So taking advantage of the Greek sovereign debt crisis, he can not only take the opportunity to acquire some Greek shipping companies not only in the financial field.
(End of this chapter)