Chapter 777 Lu's Father and Son
"Mr. Lu, you are too polite. Let's learn from each other."
After the pleasantries, Xu Liang said directly: "Mr. Lu came to visit in person. I think there must be something important?"
"Mr. Xu is a quick-witted person, so I will speak frankly.
This time, I came here for two main things.
Wanxiang hopes to acquire the shares of Huaguan Technology held by Delong Group and the auto parts business of Xiang Torch."
There are currently two major auto parts giants in China.
One is Wanxiang, and the other is Xiang Torch.
The core of Wanxiang is universal joints, shock absorbers, drive shafts and bearings.
The core of Xiang Torch is spark plugs, brake systems, headlights, mirrors and gears.
Both parties have marketing channels in the United States and have layouts in the foreign auto parts market. Xiang 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 an annual income of nearly 10 billion, occupying nearly half of the national market, and having a certain position in the world.
Before getting the due diligence information of Alloy Shares, Xu Liang's plan was to sell Xiang Torch's auto parts business to Wanxiang.
A strong alliance, he would only be a financial shareholder and share the benefits of Wanxiang Qianchao's stock price increase.
Wait until the right time to sell it.
The premise for him to do this is that he does not have a trustworthy, capable person who knows enough about the machinery and auto parts industry to be responsible for 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 in debt is for it.
Therefore, I can't sell Xiang Torch's auto parts business to anyone."
Lu Guanqiu frowned slightly.
This is inconsistent with the news he learned from the cabinet.
"Mr. Xu, Wanxiang is very sincere in acquiring Xianghuo Torch's auto parts business. 2 billion Chinese yuan, half of which is cash and half is equity of the new company."
Lu Weiding, who had not spoken much, also said: "Mr. Xu, Wanxiang and Xianghuo Torch are one of the largest auto parts giants in China. We merged the two sides.
Not only can we occupy half of China's auto parts market, but we can also save both sides' management costs, financial costs, logistics costs, etc., and produce huge synergy effects.
This is a win-win situation."
Xu Liang smiled, "The merger of Wanxiang and Xianghuo Torch does have more advantages than disadvantages. If you two are willing, I also want to acquire Wanxiang.
3 billion Chinese yuan, all in cash, how about it?"
The father and son of the Lu family fell silent.
They had no doubt that Xu Liang could come up with 3 billion Chinese yuan in cash. This money was a huge sum for others, but for Hanhua, although it was not a drop in the bucket, it could be easily taken out.
But they could not sell Wanxiang Qianchao.
This is the foundation of the Lu family.
"Mr. Xu really doesn't plan to sell the Xiang Torch auto parts business?" Lu Guanqiu asked unwillingly.
"That's right."
Seeing his determined look, Lu Guanqiu, who was disappointed, 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, Wanxiang was already a huge consortium in 2005.
In addition to the manufacturing business mainly based on auto parts and Wanxiang Qianchao as the core.
Wanxiang is also actively laying out the financial industry, and the operator is the "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 "Friendship Strategy".
Under its umbrella are Wanxiang Leasing, which was established in 1996.
There is Wanxiang Futures, which was established in 1999.
There is also the VC institution Wanxiang Venture Capital Co., Ltd., which was 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 participated in the equity of Zhejiang Commercial Bank.
Through planned and step-by-step acquisitions and reorganizations, Wanxiang's financial layout is getting bigger and bigger.
Compared with the financial and automotive industries, Wanxiang's investment in agriculture is less well known.
Lu Guanqiu, who claims to have a "farmer complex", has always favored the agricultural industry.
In the 1970s, he wanted to set up an enterprise in every village, but failed.
In the 1980s, he engaged in vertical agriculture and farms, but failed again.
In the 1990s, he engaged in foreign exchange-earning agriculture, but still failed.
In this regard, his summary is: do anything can not be separated from the environment, you must have the ability.
After 2000, the fully fledged Wanxiang began to adopt the method of acquisition and merger, investing capital in 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 for cultivation was "Huaguan Technology".
In June 2000, Wanxiang Group invested 52.25 million yuan as a strategic investor and acquired 23.75% of Huaguan Technology 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 value-added.
Speaking of this, we have to mention Wanxiang's investment strategy.
In the capital market, Wanxiang is jokingly called the "second shareholder".
The reason is that for the company he is optimistic about, he will first acquire a certain amount of shares to become the other party's second shareholder.
Then he will not interfere in management, nor will he make random comparisons.
After a long time, everyone regards him as a "sucker" second shareholder who is harmless to people and animals and has a peaceful life.
Just when everyone relaxes their vigilance and the opportunity comes.
Wanxiang will act quickly and hit the key point.
Before the major shareholder can react, it will quickly obtain the controlling rights and then control the company.
China Nonferrous Metals Co., Ltd., Zhejiang Industrial and Commercial Trust, Hangmin Co., Ltd., Lanbao Information and Tubao Baby Company in Deqing, Zhejiang Province, are all like this.
If Xu Liang hadn't intervened, Huaguan Technology would have been acquired by Wanxiang and would have become Wanxiang Denong in the future.
To be honest, compared to those acquirers who waved money or held their own relationships, Xu Liang still respected old coins like Wanxiang more.
Because you don't know when it will explode.
"How much money does Wanxiang plan to pay?" Xu Liang asked.
Huaguan Technology is engaged in deep processing of corn, although Fengshou Agriculture has the same business and is larger in scale.
But he does not intend to let Fengshou Agriculture acquire Huaguan Technology.
The reason is very simple.
It takes too much time to negotiate acquisitions with shareholders one by one, and it also takes energy to integrate.
It is better to invest directly in building a factory with this spare time.
"Remove the mutual guarantee between Xianghuo Torch and Huaguan Technology, and all the shares of Heilongjiang Seed Industry and Chifeng Seed Industry held by Huaguan Technology will be sold to Delong.
In this context, Wanxiang is willing to acquire Delong's shares in Huaguan Technology for 60 million." Lu Guanqiu smiled.
Xu Liang's face was more thoughtful.
After Huaguan Technology's 27.45% stake was acquired by Delong and became the former's largest shareholder, Huaguan Technology joined Delong's guarantee circle.
In February 2003, Huaguan Technology's board of directors passed a resolution on a mutual guarantee agreement with Xianghuo Torch, a subsidiary of Delong. Huaguan Technology ultimately provided Xianghuo Torch with a joint liability guarantee of 164 million.
Xianghuo 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 shares.
In the same year, Huaguan Technology invested 45 million to acquire 41% of the shares of Chifeng Denong Seed Co., Ltd., and increased its holdings to 75% in October of the following year, with a total investment of more than 100 million yuan.
In other words, Huaguan Technology not only provided 164 million to support Xianghuo Torch, but also provided 140 million to support the development of Delong Seed Industry.
Delong only gave back 80 million.
A company with a net asset of no more than 200 million and a net profit of less than 20 million has basically been hollowed out by Delong.
But this "emptiness" is relative to Huaguan Technology, whose main business was deep processing of corn.
In fact, the equity of Delong Chifeng Seed and Heilongjiang Denong Seed can also be regarded as its assets.
If calculated in this way, Huaguan Technology actually only "lost" 84 million on Delong.
And this "loss" is based on Huaguan Technology's guarantee for Xianghuo Torch.
If Xianghuo Torch does not go bankrupt and repays the debt on time, this loss will not exist.
But the equity of Chifeng Seed and Heilongjiang Seed held by Huaguan Technology under Denong Seed is worth 140 million, which is indeed a real asset.
Now if Xu Liang wants to recover this asset, he must pay Huaguan Technology 140 million Chinese yuan.
This is also a transaction between enterprises.
After this transaction is completed, it will be an equity transaction between Wanxiang and Delong.
"100 million, not only will Delong Group sell 27.45% of Huaguan Technology's shares to Wanxiang, but Huafu Group will also sell 6.2% of Huaguan's shares to you." Xu Liang said directly.
In 1995, Huafu Group, as the main initiator, jointly established "Huaguan Technology" with five companies including Qiqihar Yinghua Mineral Beverage Co., Ltd. and Gannan County Township Construction Joint Venture Company.
As the boss, Huafu Group holds most of the company's shares.
Later, these shares were sold to Delong Group and Wanxiang respectively, leaving 6.2% in its own hands.
In order to completely control Huaguan Technology.
In 2003, Delong signed an acquisition agreement with the actual controller of Huafu Group, "Xingshi Village", to acquire 80% of Huafu Group's shares for 94 million.
Unfortunately, after 2003, Delong's financial crisis intensified.
It is no longer possible 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 Shares and the building materials industry.
However, Xu Liang obviously does not have such a demand.
He has higher expectations for Denong and is not in a hurry to list it in the short term.
Even if he wants to go public, he does not need to find a shell like Delong.
As a major shareholder of the Hong Kong Stock Exchange, he can operate his company to be listed on the Hong Kong Stock Exchange.
Lu Guanqiu shook his head, "One hundred million is too much, 70 million."
Xu Liang certainly could not agree.
After getting the acquisition payment of 140 million from Delong, even if the 80 million debt is deducted, there is still 60 million left.
Adding the value of Huaguan Technology itself, the valuation is definitely more than 200 million.
How can 33.65% of the shares be sold for 70 million?