2003: Starting with Foreign Trade

Chapter 864 Mergers and Acquisitions in Progress

Even beauties worry about growing old, and heroes fear the approach of old age.

When Tan Jincheng saw Miss Yin again, he inexplicably thought of this sentence.

"Why is it you, Miss Yin? Shouldn't it be your brother who's here?"

Although Brother Jingcai has publicly stated several times that he has no intention of taking over, in terms of both shareholding and current position, it should be the eldest son of Mr. Yin who should approach Tan Jincheng, given that Mr. Yin is unable to appear in person.

Public information shows that, in addition to serving as a director of Lifan Group, Mr. Yin holds important positions in many subsidiaries of the group, especially in the automotive industry, where he is responsible for almost all requirements related to the automotive business.

Examples include the chairman of a passenger vehicle company, the chairman of an electronic fuel injection software company, and the chairman of a technology power company.

On the surface, Young Master Yin is currently the one with the highest and most positions at Lifan, aside from the professional management team.

Yin Suowei glanced at Tan Jincheng: "President Tan, there's no need to test me. My brother really isn't involved anymore, and I'm here representing the entire group."

Tan Jincheng nodded, as long as he could make the decision. However, he was still somewhat disappointed that Yin Suowei was representing Lifan to negotiate with him.

Mr. Yin is labeled as a "spendthrift," but this is not actually the case. He started his own business with his father at the age of 21 and once took charge of important sectors such as real estate, futures, and football clubs.

In the last century, Lifan's Motorola sold very well, but compared to its city rival Zongshen, Lifan was inferior in both product quality and brand awareness. The football club was one of the key factors that enabled it to become a nationally renowned brand.

To put it bluntly, Mr. Yin is a marketing savvy, and using football to market his brand is one of his strategies.

Tan Jincheng didn't have much contact with this 45-year-old young master, but in the two times they did meet, he could tell that this man was quite different from the rumors. He was very humble and approachable in private.

If we were to say what the biggest mistake he ever made in his life was, it would probably be that car chase, but the whole thing seems rather bizarre.

Unfortunately, just like Zhu Xiong Ying after the death of Crown Princess Chang, he was destined to be no match for Zhu Yunwen.

Seeing that Tan Jincheng only nodded without replying, Yin Suowei felt a little discouraged. In front of others, she was the successor of Lifan who had stepped from behind the scenes to the forefront at the age of 24, and she held an extraordinary position in the circle of rich second-generation people in Chongqing.

However, this person started his own business at the age of 19 and built his company into one of the top 500 private enterprises in China within ten years, with Weilai Group ranking among the top 50.

At 31, his life seemed to be on a winning streak, and even his father couldn't put on airs in front of him.

Regarding the automobile production qualification, we are ready to accept Mr. Li's offer. Mr. Mou is in contact with Mr. Li. In addition, we want to change the entity we want to cooperate with Mr. Tan to Weilai Group.

"Is it about new energy sources?"

The only area for cooperation with Weilai is new energy. It seems that Lifan is not planning to give up and try again.

"Yes, in the field of new energy. However, I must clarify that our group can accept equity investment, but not outright acquisition."

In terms of industrial layout, Lifan mainly has new energy, automobiles, motorcycles and power electric industries. The cooperation in new energy mentioned by Yin Suowei actually includes three major sectors: shared mobility, charging piles, battery swapping and auto parts.

The company has six main business segments, with the motorcycle and power segment being a particular focus of their attention. This is probably what they mean by not accepting a complete acquisition.

It's really interesting.

Tan Jincheng smiled and said, "If it's a complete acquisition, then it would have to be done under the name of ByteDance."

Why would Weilai acquire the motorcycle business? It would be more like to acquire Lifan in its entirety under the name of its controlling shareholder, ByteDance, and then dismantle it by merging the motorcycle and power business into FlashTech, and the new energy and automobile business into Weilai Auto.

When Tan Jincheng smiled, Miss Yin seemed to have her little thoughts seen through, and she felt a little embarrassed.

She has worked at Lifan for five years and has grown a lot in that time, but at Lifan, she can only be considered a junior. She is far from having the shrewdness and charisma that someone like Tan Jincheng, who holds great power, has cultivated.

"A gentleman does not take what others love. Lifan's motorcycle and power business is indeed a supplement to Flash Technology, but it is not a necessity. However, cooperation in the field of new energy can bring some differences to Wei."

If FlashTech wants to develop motorcycles, it can definitely develop electric ones. The traditional motorcycle market will be dominated by high-end brands in the future, and Lifan is obviously not a high-end brand.

Yin Suowei pouted, "You call yourself a gentleman?"

"That would be perfect. We both have common needs. I just don't know what kind of cooperation Mr. Tan would like to offer?"

Their family is really afraid of a full acquisition by Tan Jincheng. Currently, Lifan's total debt is around 200 billion yuan, and a debt ratio of 73% is quite dangerous for a car company. After deducting liabilities from total assets, Lifan's owner's equity is 68 billion yuan.

Lifan Holdings, with a current market value of around 110 billion yuan, is a good deal for Wei Lai, both in terms of business type and asset comparison, and it can't be considered "picking up trash".

A full acquisition at a reasonable premium would be even more profitable than simply acquiring a controlling stake.

"Let's discuss the specifics of our collaboration."

"Ok."

Yin Suowei breathed a sigh of relief. After speaking, she took out a stack of A4 papers from her briefcase. These were the internal plans that her company had made before. The last time she met Tan Jincheng was at a family dinner, and she didn't feel anything at the time.

But now, facing Tan Jincheng, a handsome young entrepreneur and self-made man, alone, she truly feels immense pressure.

Only then did she understand why her father had printed out the details of the collaboration using a PowerPoint presentation.

Sure enough, all the so-called negotiations she had encountered before were too weak; interacting with top-tier entrepreneurs like these was the real learning experience.

Just one aura, one smile, can overwhelm you and make it hard to breathe.

The cooperation methods shown in the PPT are also very simple, with two models. One is to fully acquire Lifan New Energy's business, including parts, charging piles, battery swapping, etc., just like selling the car production license, a one-off deal.

Another approach is to acquire a controlling stake in Lifan Holdings, the listed company, through a private placement, thereby gaining control of the new energy business segment and establishing a long-term cooperation agreement with Lifan.

Both methods are limited to the new energy sector.

After a cursory glance, Tan Jincheng fell into deep thought, his fingers lightly tapping on the office desk.

The financial licenses he coveted were not included in this collaboration, and the Yuanyang plot in the Economic Development Zone was not mentioned in the PowerPoint presentation. The financial licenses, needless to say, are another matter.

The Yuanyang plot of land, with a total area of ​​over 49 square meters and buildings on it, is also a high-quality asset.

"Your company has sold its shares in Lifan Automobile Co., Ltd. What will happen to the factory buildings and equipment? Don't you plan to sell them? Mr. Yin, didn't you mention that we planned to invest in building a factory in the Southwest region?"

It's just a collaboration in the new energy sector, but it feels like something's missing, so Tan Jincheng still intends to try and secure it.

"Mr. Tan mentioned the Yuanyang plot in the Economic Development Zone? Is your company interested in that plot and the buildings there?"

Tan Jincheng's selfless state of mind while deep in thought, and even the tapping on the desk, were irritating her. She was now regretting not having seized this opportunity to meet him and instead letting her older brother come.

At least now that the eldest brother is here, President Tan shouldn't just ignore him, right?
"Yes, the Yuanyang plot. Our company is interested in those two plots. I wonder if you are willing to part with them? The price is negotiable."

The price was negotiable; a casual remark revealed boundless confidence. However, given Wei Lai's cash flow and financing capabilities, acquiring these two plots of land was indeed a piece of cake.

"Selling is possible, but the price still needs to be evaluated."

"Alright, if you can transfer these two plots of land and the factory buildings, we prefer to cooperate with you through a targeted share issuance."

Initial assessments showed that Lifan's assets were of high quality. Even the motorcycle and power business, which Tan Jincheng didn't value, was strongly recommended by professional appraisal agencies to be acquired by Flash Technology.

Professional assessment agencies even suggested that the acquisition included automobile production qualifications, with the average market value of listed companies around 110 billion yuan, and the controlling shareholder, Lifan Holdings, holding a 49.40% stake.

ByteDance only needs to acquire more than 33.42% of Lifan and other shareholders to control the company, and the acquisition price is only about 40 billion yuan. However, the valuation of the two plots of land in Yuanyang alone is 30 billion yuan according to the appraisal agency.

Although taking control would require dealing with Lifan's debts, the deal was a very worthwhile one by splitting up the entire group and selling off various non-core businesses.

Take the automobile production qualification sold to Li Bing as an example; that alone could recoup 6.5 million yuan.

The team behind ByteDance's massive acquisition engine has experience in acquiring and disposing of assets in bulk; that's how Changfeng Group did it back then.

Yin Suowei's deliberate emphasis on not accepting acquisitions is based on her knowledge of ByteDance's operational capabilities in the capital market. The case of its swift acquisition of Changfeng Group and its several bids for Shuguang Auto left a deep impression on these older generation entrepreneurs.

Once ByteDance convinces the Chongqing government and uses its financial resources, they could very well take over Lifan.

Although Boss Yin has plans to retire, he doesn't want to give up the business he has worked so hard to build. Boss Yin's worries are not unfounded. In fact, Tan Jincheng had such plans before his last trip to the mountain city.

The mountain city holds a special position, not only because of its pickup trucks, but also because of the considerable sales of its tank series in Southwest China. Once the 318 self-driving tour becomes popular, the status of the tank series in Southwest China will be even more extraordinary.

Acquiring Lifan would be a very worthwhile endeavor for the group, but Tan Jincheng had his concerns that prevented him from taking such action. To gain control of Lifan, he would have to cooperate with the Chongqing government, but he dared not offend the current head of Chongqing.

This is not a business issue.

"Mr. Tan should be aware of the valuation of the Yuanyang plot. The estimated value, including the buildings on the ground, is around 30 billion yuan. However, Mr. Tan also knows that the land will appreciate in value."

“I can offer a 10% premium. As for the evaluation of the new energy branch and the additional share issuance, let our team from Weilai handle those.”

Future valuations may be higher, but cash flow is more important for Lifan. The cooperation with Weilai can greatly alleviate Lifan's cash flow shortage. Given Lifan's current reputation, it will be difficult for them to raise funds in the capital market.

In Huang Ming's words, Lifan was already in a semi-bankruptcy state in the investment circle. It is very difficult for a semi-bankrupt company to raise funds. Most investment institutions and enterprises are waiting to dispose of the corpse.

If it weren't for concerns about Geely's involvement, Tan Jincheng wouldn't mind waiting until after bankruptcy to divide the remains.

In Tan Jincheng's view, Geely is probably interested in Lifan's land, but as for the new energy sector, Geely has not yet made any plans in that area.

“Okay, I’ll go to Ningbo later. This time, my company has entrusted me with the full authority to handle this cooperation. Mr. Tan, you can contact me directly if you need anything.”

“That’s great. I’ll give you the contact information of Mr. Zhang Yong, the CEO of Weilai, later. I will also communicate with him.”

After finishing their business, Yin Suowei finally had time to ask the question that had been on her mind: "Is President Tan always this efficient in his work?"

The president of Yangzi Motors only encountered a few setbacks during the negotiation process before Wei Lai took action. Zhu Pei's decisive departure from Shancheng also caught Lifan off guard, as they had never encountered such a situation in their previous collaborations.

Isn't this a bit too hasty?
Today, her negotiations with Tan Jincheng were quite efficient, with absolutely no haggling involved.

While Tan Jincheng was looking at the PPT, she had been paying close attention. She guessed that the other party hadn't really looked at the detailed terms in the PPT.
In other words, it's highly likely that no matter what's written in the PPT, the other party already has their own plans and isn't affected by our side at all.

"In my opinion, when it comes to doing business, if both parties are willing to cooperate and have a basis for cooperation, then they should have an open and honest conversation. If they can talk it out, then they can talk it out; if they can't, then they can part ways amicably. There's no need to make it so complicated."

"It's actually the same as buying clothes in a clothing store. If you like something and the price is right, you buy it. If the customer is satisfied, the shop owner makes a profit, and everyone is happy to do business together."

Yin Suowei didn't know what to say for a moment. Was it really that simple? This was completely different from what she had learned while studying abroad.

After a long pause, he slowly said, "President Tan's idea is truly unique."

Tan Jincheng smiled and said, "There is an old saying in our country that goes, 'The greatest truths are the simplest.' Don't overcomplicate things."

He gave Zhang Yong's contact information to Miss Yin, and then spoke with Zhang Yong in front of her. Tan Jincheng invited Miss Yin to his home, since she had treated him well at Shancheng Renjia last time.

"President Gu is in the capital too? I must meet him."

Yin Suowei was very curious about Gu Qingqing. The two were about the same age, but their life trajectories were completely different. Gu Qingqing was now a mother of two, while she was still single.

As a woman of the new era, Gu Qingqing's sacrifice of her career achievements for her family is quite puzzling to her. If it weren't for having two children, Gu Qingqing's career achievements would probably have reached another level.

"Mr. Tan, are you a chauvinist?"

"Why do you ask?"

"If President Gu hadn't returned to his family, wouldn't he have achieved even greater success in his career?"

On the way home, Yin Suowei made conversation by asking, "My parents have a very high opinion of Tan Jincheng. I witnessed Tan Jincheng's aura and decisiveness during the negotiation just now, but I still don't know enough about him."

"Whether I am a chauvinist or not, it's not convincing for me to say that. You'd have to ask President Gu. Also, everyone's pursuits are different."

No wonder she's a woman who dares to fight for the family fortune with her brother, who's 16 years older than her and started working hard at 21. She dares to ask anything.

"So, Mr. Tan, what do you think? If Mr. Gu were to get involved in Wei Lai's operations now, what would you think?"

"This has nothing to do with male chauvinism, right? But I can still answer your question."

"You may not know this, but in the entire system including Orange Technology, Flashpoint and Weilai, if I can't be contacted for any reason, President Gu is the person primarily responsible. She can take full control of my rights."

"In addition, our family fund is also managed by her, and the currently very popular Honor of Kings and the Honor of Kings professional league that is being planned are both managed by President Gu. Your brother should know about this."

The Lifan family assets managed by "Brother Jingcai" have numerous investments in entertainment and gaming.

"Therefore, I did not restrict Mr. Gu's work content, which should prove that I am not the kind of male chauvinist you mentioned."

"Furthermore, in both my mindset and Mr. Gu's, it is only natural to do things at the right age, and we share the same belief on this point."

While Tan Jincheng was discussing cooperation with Yin Suowei, Li Bing was also busy. When Lifan expressed its willingness to accept Li Bing's offer, he quickly led his team to Shancheng to discuss the acquisition of Lifan Automobile Co., Ltd.'s equity with Mou Gang.

On March 11, 2016, the second Friday of March, after the market closed, Lifan Co., Ltd. announced a trading halt due to a major event.

On the day of the trading halt, Lifan Co., Ltd. closed at 8.94 yuan, down 0.67% intraday, hitting a new low since February 2. Its market value was 112.29 billion yuan. The market was abuzz with discussion about the trading halt of Lifan Co., Ltd., which has been plagued by negative news recently and whose 2016 new energy subsidies have been canceled.

On the day the stock was suspended, "Shancheng Xinfan Machinery Equipment Co., Ltd.", which Li Bing registered in Shancheng, was also officially listed.

"Well, it's a necessary procedure. Although we plan to locate the factory in Shanghai, we still have to go through the formalities."

Every city attaches great importance to the automotive industry. Although Lifan's transfer of its automotive business is due to the company's business needs, the attitude of the Chongqing government is also very important.

Fortunately, there is still a Xiaokang in Chongqing; otherwise, it's uncertain whether Li Bing's acquisition would have been approved.

"That's right. We spent almost a year dealing with this back then, but the fact that you two sides have reached an agreement on the price is a big step forward. Speaking of which, the price of car licenses is really rising fast."

Zhang Yong was working with Li Bing in Chongqing. Tan Jincheng stopped showing up after the cooperation plan was finalized. His reason was simple: in addition to attending the Two Sessions, he also planned to go to Malaysia.

Despite the cooperation, he is currently avoiding contact with the Chongqing government as much as possible, as the timing is too sensitive.

Fortunately, unlike Li Bing's purchase of automobile production qualifications, Wei Lai only reached a cooperation agreement with Lifan through a targeted share issuance. In addition, the construction and production of Yangzi Automobile in Chongqing will not be so fast.

Besides, there's also Zhu Pei.

"Who can argue with that? Looking at it now, the two car production licenses that President Tan obtained are practically free. He's made a killing."

"6.5 million yuan is expensive, but it's not expensive in the long run. This thing will only become more and more valuable."

With more and more new energy vehicle manufacturers and stricter regulations on automobile production qualifications, the number of vehicles on the market is decreasing, making them increasingly expensive. Buying one now is definitely a good deal.

After negotiating the acquisition agreement with Lifan and completing all the procedures, Li Bing's Wenjie became the only new energy vehicle company in China with its own production qualifications, instead of relying on other manufacturers.

On this point alone, Li Bing has won; he certainly spent those 6.5 million yuan very happily.

"Speaking of which, we have to thank President Tan. If it weren't for his underhanded tricks, we wouldn't have been able to reach an agreement so quickly."

On the day Lifan suspended trading, the two parties had already signed a preliminary agreement, under which Lifan Industrial Group planned to transfer its 100% equity stake in Shancheng Lifan Automobile Co., Ltd. to Shancheng Xinfan Machinery Equipment Co., Ltd. for RMB 6.5 million.

After the share transfer was completed, Lifan's automobile production qualification officially belonged to Li Bing, and the old guy has been in high spirits lately.

These new electric vehicle startups follow the internet-style approach, and being number one is quite a gimmick for subsequent financing.

"Haha, the boss's approach has certainly sped things up, but my negotiations aren't going as fast as yours."

The main issue is the valuation of Lifan New Energy. The two sides still have some disagreements, and there is still room for discussion. However, this is understandable, as the details of cooperation are always more complicated than Li Bing's overall acquisition.

"It's alright, you're not short of money anyway. If you don't want to give more, we can talk it over slowly. Didn't President Tan say that everything is up to you?"

Tan Jincheng's underhanded tactics did indeed speed up the negotiation process, and at the same time, they brought about a rare unity within Lifan. It is extremely rare for Lifan to have three parties working together. In recent days, not only has Miss Yin, who is in full charge of this project, come forward to negotiate, but even Young Master Yin and even Boss Yin have met with Zhang Yong.

The management team is also actively pushing forward with this transaction. It is conservatively estimated that this tripartite cooperation will bring Lifan at least 40 billion yuan in liquid cash.

40 billion yuan can reduce Lifan's debt ratio from 73% to 56%, bringing about a qualitative change for the company.

Most importantly, by associating with Shangweilai, a leading new energy vehicle company, one can also benefit from the Shangweilai concept in the A-share market.

"By the way, what is Mr. Tan doing in Malaysia at this time? Is there any progress with Proton?"

(End of this chapter)