Chapter 777 Lu’s Father and Son
“Mr. Lu is too polite, let’s learn from each other.”
After being polite, Xu Liang said directly: “Mr. Lu personally came to visit, I think he must have something important to do. ?”
“Mr. Xu said it bluntly.
There are two main things to do here.
Wanxiang hopes to acquire the shares of Huaguan Technology held by Delong Group and the auto parts business of Hunan Torch. ”
There are currently two major auto parts giants in China.
One is Wanxiang and the other is Xianghuo Torch.
The core of Wanxiang is universal joints and shock absorbers , transmission shaft and bearings
The core of Xiang Torch is the spark plug, brake system, lights, mirrors and gears.
Both parties have marketing channels in the United States and are deployed in foreign auto parts markets. Hunan Torch is larger in scale, but its profitability is not as good as Wanxiang.
If the two parties can merge, they will create an auto parts giant with annual revenue of nearly 10 billion, occupying nearly half of the country's market, and having a certain position in the world.
Before obtaining the due diligence information from Alloy Holdings, Xu Liang’s plan was also to sell Xiang Torch’s auto parts business to Wanxiang.
Joining forces, I will only be a financial shareholder and share the profits from the rising stock price of Wanxiang Qianchao.
Sell it when the time is right.
The premise for why he did this was that he did not have a trustworthy, capable person who knew enough about the machinery and auto parts industry to be in charge of this business.
But the appearance of Peng Shengyu undoubtedly gave him another choice.
“Mr. Lu, I’m sorry.
Xiang Torch is the pearl of Delong Industrial’s assets. The main reason why I am willing to acquire Delong on debt is for it.
So, it is impossible for me to sell the Xianghuo Auto Parts business to anyone.”
Lu Guanqiu frowned slightly.
This is inconsistent with the information he learned from the cabinet.
"Mr. Xu, Wanxiang is very sincere in acquiring the Hunan Torch Auto Parts business. It is 2 billion Huaxia coins, half of which is cash and half is the equity of the new company."
There has been no How to speak Lu Weiding also said: "Mr. Xu, Wanxiang and Xiang Torch are one of the largest auto parts giants in China. Our merger will not only occupy half of China's auto parts market, but also save money." The management costs, financial costs, logistics costs, etc. of both parties create huge synergy effects
This is a matter of mutual benefit. "
Xu Liang smiled, "The merger of Wanxiang and Hunan Torch does have more advantages than disadvantages. If you two are willing, I also want to acquire Wanxiang.
How about 3 billion Huaxia coins, all in cash? ”
The Lu family fell silent.
They had no doubt that Xu Liang could get 3 billion Huaxia coins in cash. This money was a huge sum of money to others, but to Hanhua, Although it's not a drop in the bucket, it can be easily taken out
But they can't sell Wanxiang Money Tide.
This is the foundation of the Lu family.
"Mr. Xu really doesn't plan to sell the Hunan Torch Auto Parts business?" Lu Guanqiu asked unwillingly.
“Yes.”
Seeing his firm expression, Lu Guanqiu, who was disappointed in his heart, quickly changed the subject.
"What about Huaguan Technology?"
Speaking of Huaguan Technology, we have to talk about Lu's industrial layout.
Everyone thinks that Lu Guanqiu is engaged in automobiles. In fact, in 2005, Wanxiang was already a huge consortium.
In addition to focusing on auto parts, Wanxiang Qianchao is the core manufacturing business.
Wanxiang is also actively deploying in the financial industry, and the manipulator is "Young Marshal" Lu Weiding.
Under his leadership, Pengcheng Tonglian Investment Co., Ltd., the predecessor of Tonglian Capital, was established in 1995.
This company has also become a financial flagship similar to Delong’s “Youlian Strategy”.
Under its umbrella is Wanxiang Leasing, which was established in 1996.
There is Wanxiang Futures established in 1999.
There is also Wanxiang Venture Capital Co., Ltd., a VC institution established in 2000.
Also in 2002, Wanxiang invested 120 million yuan in Minsheng Life Insurance, and then further controlled Minsheng Life Insurance.
In 2004, Wanxiang invested in Zheshang Bank.
Through planned and step-by-step acquisitions and restructuring, Wanxiang has expanded its financial footprint.
Compared to the financial and automobile industries, Wanxiang is rarely known for its investment in agriculture.
Lu Guanqiu, who claims to have a "farmer complex", has always favored the agricultural industry.
In the 1970s, he wanted to set up a business in every village, but failed.
In the 1980s, we tried to establish three-dimensional agriculture and set up a farm, but it failed again.
In the 1990s, foreign exchange-earning agriculture failed.
In this regard, his conclusion is: you cannot do anything without the environment, and you must have this ability.
After 2000, the fledgling Wanxiang began to adopt the method of acquisitions and mergers, investing capital into a high-quality enterprise and cultivating it into a listed company in a relatively short period of time.
In the agricultural field, the first company selected by Wanxiang to train was ‘Huaguan Technology’.
In June 2000, Wanxiang Group invested 52.25 million yuan as a strategic investor to acquire 23.75% of Huaguan Technology's shares from Heilongjiang Huafu Group, becoming its second largest shareholder.
In September 2002, the company was listed on the Shanghai Stock Exchange, and Wanxiang's investment realized appreciation.
Speaking of this, I have to mention Wanxiang’s investment strategy.
In the capital market, Wanxiang is jokingly called the ‘second shareholder’. The reason is that for companies he is optimistic about, he will first acquire a certain amount of shares and become the other party's second shareholder.
Then I don’t interfere in management, and I don’t compare blindly.
As time went by, everyone regarded him as a harmless second shareholder who lived a peaceful life.
Just when everyone relaxes their vigilance, the opportunity comes.
Wanxiang will strike quickly and hit the critical point.
Before the major shareholders can react, quickly obtain the controlling stake and then take control of the company.
CNMC, Zhejiang Industrial and Commercial Trust, Hangmin Holdings, Sapphire Information and Bunny Company in Deqing, Zhejiang Province are all like this.
Without Xu Liang’s intrusion, Huaguan Technology would have been eaten by Wanxiang and become Wanxiang Denong in the future.
To be honest, Xu Liang is more in awe of old coins like Wanxiang than those acquirers who wave banknotes or maintain relationships.
Because you don’t know when it will break out.
"How much money does Wanxiang plan to pay?" Xu Liang asked.
Huaguan Technology is engaged in deep processing of corn, although Harvest Agriculture also has the same business, and the scale is larger.
But he does not plan to let Harvest Agriculture acquire Huaguan Technology.
The reason is simple.
Negotiating acquisitions with each shareholder is too time-consuming, and integrating them also requires energy.
If you have this spare time, you might as well directly invest in building a factory.
“The mutual guarantee between Xiang Torch and Huaguan Technology was lifted, and all the shares of Heilongjiang Seed Industry and Chifeng Seed Industry held by Huaguan Technology were sold to Delong.
In this context , Wanxiang is willing to acquire the equity of Huaguan Technology held by Delong for 60 million," Lu Guanqiu said with a smile.
There was a hint of thought on Xu Liang's face.
After 27.45% of Huaguan Technology’s equity was acquired by Delong and became the former’s largest shareholder, Huaguan Technology joined Delong’s guarantee circle.
In February 2003, the board of directors of Huaguan Technology approved a mutual guarantee agreement with Delong's Hunan Torch. Huaguan Technology ultimately provided a joint liability guarantee of 164 million yuan for Hunan Torch.
Xiang Torch provided it with a guarantee of 80 million.
In September of the same year, Huaguan Technology invested 40 million to establish Heilongjiang Denong Seed Industry and held half of the equity.
In the same year, Huaguan Technology invested 45 million yuan to acquire 41% of the equity of Chifeng Denong Seed Co., Ltd., and increased its holdings to 75% in October of the following year, with a total cost of more than 100 million yuan.
In other words, Huaguan Technology not only spent 164 million to support Hunan Torch, but also spent 140 million to support the development of Delong Seed Industry.
But Delong's feedback was only 80 million.
A company with net assets of no more than 200 million and net profit of less than 20 million has basically been hollowed out by Delong.
But this kind of "emptiness" is compared to Huaguan Technology, whose main business was corn deep processing.
In fact, the equity interests in Delong Chifeng Seed Industry and Heilongjiang Denong Seed Industry are also considered its assets.
If you calculate it this way, Huaguan Technology actually only 'lost' 84 million on Delong.
And this kind of ‘loss’ is based on Huaguan Technology’s guarantee for Hunan Torch.
If Xiang Torch did not close down and repaid its debts on time, this kind of loss would not exist.
However, the 140 million worth of equity held by Huaguan Technology in Chifeng Seed Industry and Heilongjiang Seed Industry under Denong Seed Industry is indeed a real asset.
If Xu Liang wants to recover this asset now, he will have to pay Huaguan Technology 140 million Huaxia coins.
This is also a transaction between companies.
After this transaction is completed, the equity transaction between Wanxiang and Delong will begin.
“For 100 million, not only the 27.45% equity of Huaguan Technology held by Delong Group will be sold to Wanxiang, but the 6.2% equity of Huaguan Technology held by Huafu Group will also be sold to you.” Xu Liang said directly.
In 1995, Huafu Group, as the main sponsor, jointly launched the establishment of 'Huaguan Technology' with five companies, including Qiqihar Yinghua Mineral Beverage Co., Ltd. and Gannan County Township Construction Associates.
As the boss, Hua Fu Group accounts for most of the company's equity.
Later, these shares were sold to Delong Group and Wanxiang respectively, leaving 6.2% in my own hands.
In order to completely control Huaguan Technology.
In 2003, Delong signed an acquisition agreement with the collective "Xing Shishi Village", the actual controller behind the Huafu Group, to acquire 80% of the shares of the Huafu Group for 94 million.
Unfortunately, after 2003, Delong’s financial crisis worsened.
There is no way to integrate Delong's agricultural assets through Huaguan Technology.
Otherwise, according to Delong’s plan, both Denong Seed Industry and Delong Agricultural Supermarket will be integrated into Huaguan Technology.
Just like Zhongyan Holdings and the textile industry, Tianshan Holdings and the building materials industry.
But Xu Liang obviously has no such need.
He has higher expectations for Denong and is not in a hurry to get it listed in the short term.
Even if you want to go public, you don’t need to do everything possible to find a shell like Delong.
As a major shareholder of the Hong Kong Stock Exchange, he can list his companies on the Hong Kong Stock Exchange.
Lu Guanqiu shook his head, "One hundred million is too much, 70 million."
Of course Xu Liang could not agree.
After receiving Delong's 140 million acquisition money, even after deducting the 80 million debt, there is still 60 million left.
Coupled with the value of Huaguan Technology itself, the valuation is definitely more than 200 million.
How could 33.65% of the equity be sold for only 70 million?
(End of this chapter)