2003: Starting with Foreign Trade

Chapter 889 Scraping the Bone to Treat the Wound
"A lightning-fast acquisition!"

"The grand finale of the acquisition year: ByteDance's advertising platform acquired Meizu for 128 billion yuan!"

"What can you do in 11 days? Take a long trip? Read a book? Complete a multi-billion dollar acquisition!"

On the first day of December, the front pages of major mobile phone, automotive, and financial media were filled with reports about ByteDance's acquisition of Meizu, with a dizzying array of details and inside stories.

Meizu's forums were abuzz with the acquisition, and its daily active users reached their peak in 2016.

"You really went fast and ruthless this time, but you've caused quite a stir. You need to be careful not to overdo it."

Lei Jun stared at Tan Jincheng with amusement. From the day the Internet Conference ended on the 18th, in less than half a month, he moved around to four different places and made various moves, taking over Meizu with lightning speed. It was simply a dream come true.

"Hehe, I know, I'll handle it. Thank you so much, big brother, this time."

The person Zhao Xinyi mentioned asking for help was Lei Jun. He had met many people in the mobile phone industry, but he knew little about the specifics of how to operate the business. So he asked Lei Jun to recommend a group of capable people in the industry to help out.

Lei Jun urgently contacted several people for him, and while on a business trip to Hong Kong, he also made a detour to Zhuhai to meet with Tan Jincheng.

"Your move was a bit unexpected. Also, regardless of what others say, I think you made a pretty good deal."

Based on the real-time exchange rate, Tan Jincheng valued Meizu at $36 billion. Acquiring a top 10 domestic mobile phone brand for $36 billion, gaining control of 2300 offline stores and 3000 million users, is a win-win situation no matter how you look at it.

The valuation is certainly a bit high, but for someone like Tan Jincheng, money is just a number. The key is to see what this money can bring.

Moreover, ByteDance used US dollars to pay for the two major transfer agreements involving Ali and Huang Zhang. The real-time exchange rate in December 2016 had reached 6.9, and ByteDance gained a considerable advantage just from the exchange rate difference.

"Hehe, is that how you see it, brother? Now that you say so, I'm even more confident."

After five or six years of cooperation, Lei Jun has become both a mentor and a friend to Tan Jincheng. Although the company has developed rapidly, Tan Jincheng is always aware of his shortcomings and will never pretend to know what he doesn't.

Learning is the most important thing. Lei Jun, his business partner who has been in the business world for many years, is his role model. He dares to call and ask questions even in the middle of the night if he doesn't understand something.

Over time, Lei Jun also grew to like this ambitious and motivated junior colleague and was willing to offer him some advice.

Lei Jun shook his head: "Don't worry about those things. There's no such thing as an absolutely cheap acquisition. Actually, you've already found the problem with Meizu."

What is Meizu's biggest problem? It's Huang Zhang's family-style management.

While family-run businesses can succeed, it's extremely difficult in the high-tech internet and mobile phone industry, especially since Huang Zhang has practically brought all his extended family members into the company.

As revenue grows and market competition intensifies, how could such a company not encounter problems?

Although Tan Jincheng was ruthless, his first appearance involved a 5% layoff, eliminating some key family members, including Huang Zhang's older sister, it was undeniably the best way to cut the Gordian knot.

"If you make good use of Li Nan, Bai Yongxiang, and Li Yan, the existing Meizu system will basically not collapse. Although you are trying to expand the ecosystem, you can't easily ruin the existing business, otherwise your reputation will be damaged."

Tan Jincheng nodded repeatedly. Lei Jun's suggestions were all practical. Acquiring a company was just a supplement to his system, but as a company that had been established for more than ten years and influenced countless people, it would indeed have a great impact on his reputation if it were to be easily destroyed.

The capital market in 2016 was extremely active, with notable events including the Vanke-Baoneng battle, SF Express's backdoor listing through Dingtai New Materials, and the merger of Didi and Uber.

There have been more than a dozen acquisitions involving tens of billions of dollars. The acquisition of 128 billion yuan and the valuation of 36 billion US dollars are really nothing. The reason why this one has caused such a big commotion is that

Firstly, it's because the end of the year is approaching, and most of the things that needed to be collected have been collected, so the rest are starting to rest. Secondly, Tan Jincheng's series of actions this time were just too fast, so fast that it was dazzling.

Furthermore, according to various leaks and information released by Huang's family, Meizu played the role of a victim in the process of increasing the percentage from 33% to 51%, similar to being tricked by Ahri and Tan Jincheng.

In reality, there's no logic to the story behind it. Lei Jun had worked in Zhushi for many years and was an old acquaintance of Huang Zhang. How could he not know what kind of person Huang Zhang was?

If he hadn't wanted both, no matter how domineering Tan Jincheng was, he wouldn't have had the slightest chance.

However, Huang Zhang, or rather Meizu's die-hard fans, were furious on the Meizu forum. Under these circumstances, Tan Jincheng had to produce some results.

From the perspective of public opinion, this acquisition is unfavorable to Tan Jincheng. Just recently, it was revealed that he was the cash king of Zhejiang Province, and within a few months, he has taken over a company in such a strong manner.

Public opinion tends to sympathize with the underdog, but Tan Jincheng is now the undisputed strongman. Any flaw in his capital operations can easily spark controversy.

"Okay, I understand. I will take Meizu's existing business seriously and also eliminate the impact of public opinion as soon as possible. I really want to thank Mr. Lei this time."

What the outside world saw was an eleven-day lightning acquisition, but behind it was Tan Jincheng's strong personal strength and network of connections, and due diligence personally overseen by the head of the internationally renowned investment firm Sequoia China.

The second-largest shareholder and several smaller shareholders were won over through a swap of interests, and the purge was backed by the current leader of a popular mobile phone manufacturer.

The cleanup itself is neither scary nor troublesome; the troublesome part is finding people to take over the remaining business, including the existing technical team and the management team from outside the company. Although Tan Jincheng spoke with them separately, promising to give them important positions and provide them with certain stock incentives, the cleanup is not the real challenge.

However, in the current turbulent environment, it is indeed impossible to have absolute trust in the original Meizu employees. The saying "if you doubt someone, don't use them" also depends on the background and environment.

The managers introduced by Lei Jun are relatively easier to manage, at least so far they share the same interests.

Meizu's mobile phone business will not be abandoned, but Tan Jincheng really doesn't have a good solution. His energy is limited, and he can no longer spare time to manage a company in an industry with even fiercer competition than the automotive industry.

All I could do was help Zhao Xinyi sort out Meizu from top to bottom. The rest was left to the management team that Tan Jincheng valued. As for how things would develop, we could only leave it to fate.

Lei Jun only stayed in Zhushi for less than two hours. He really did come specifically to see Tan Jincheng off and offer some advice. He came and went in a hurry.

Xiaomi's IPO plan has entered the preparation stage. Despite being so busy, he still took the time to come over, which truly shows his sincere willingness to help.

"Hello Mr. Chen, I'll be relying on you from now on."

The person personally introduced by Lei Jun is naturally extraordinary.

Chen Mingyong, former vice president of OPPO, was responsible for supply chain management and production operations. He is a key figure that Tan Jincheng urgently needs.

With him, they could fire Huang Zhang's younger brother, who was in charge of Meizu's supply chain and production operations, and also served as Meizu's CEO, wielding considerable power.

Huang Zhang's willingness to retire so easily is largely due to his control of the company through his younger brother.

"Not at all, I'll be relying on President Tan from now on."

Chen Mingyong had been unemployed at home for half a year after leaving OPPO. With Lei Jun's introduction, he agreed without hesitation.

Huang Zhang and his Meizu are well-known in the mobile phone industry. Although they haven't been doing so well in recent years, Chen Mingyong believes that they still have a solid foundation. As long as they get back on track, maintaining their position in the top 10 should not be a problem.

Huang Zhang's success proved his ability, but when faced with Tan Jincheng's lightning acquisition, he was as helpless as if he were playing with Ahri, which is enough to show Tan Jincheng's ability.

In the eyes of a mature professional, there is nothing wrong with Tan Jincheng's collusion with Ali. If he did not cooperate with Ali, even if he obtained a 33% stake, his final fate would be the same as Ali's.

Tan Jincheng invited him to replace Huang Zhang's younger brother as CEO, in charge of supply chain and production operations, which falls within his business scope.

"We have little experience in the mobile phone business, so this business will continue to be handled by Mr. Chen and his colleagues at Meizu."

Lei Jun, the vice president of OPPO, has indeed recommended a very suitable person.

With his involvement, Meizu, amidst its turmoil, can more or less leverage some resources from OPPO and Xiaomi to accelerate its return to normalcy.

"Regarding compensation, I can't give Mr. Chen shares yet, but I will complete the capital increase and share expansion of Meizu by the first quarter of next year at the latest. At that time, I will allocate a certain number of shares to the management team. We'll discuss the specific percentages later."

33% is not enough for Tan Jincheng, and 51% is obviously not enough to perfectly control Meizu. Restructuring, capital increase and share expansion of Meizu are already in the works, but they will have to wait until the company is cleaned up first.

This process will take at least several months.

During his week in Zhuhai, Tan Jincheng ruthlessly purged Meizu. After taking control of finance and personnel, Chen Mingyong, the former vice president of OPPO, was appointed as the new CEO of Meizu, in charge of supply chain and production.

One by one, his immediate family members were dismissed, and even his distant relatives at the front desk were laid off by Tan Jincheng.

Huang Zhang and his family spent the most depressing 20 days since Meizu's founding, but now the company belongs to someone else, and there's nothing they can do.

Tan Jincheng had no intention of discussing it with Huang Zhang at all; he was merely informing him.

"Just admit defeat. There's no point in forcing it."

Huang Zhang, with a stubble beard, looked dejected and let out a final sigh, then smiled wryly and said, "Fortunately, this boss is quite generous; he gave you all the maximum compensation after you were laid off."

Tan Jincheng did indeed offer generous compensation during the layoffs; he wouldn't haggle over such small sums. "That's true. So what about your shares, brother?"

Huang Zhang's younger brother stepped down as CEO today. He seems to be taking it all in stride. His older brother has lost power, and his older sister has left. How could he, as the younger brother, possibly escape this fate? The subsidies Tan Jincheng gave him were indeed quite substantial.

The two brothers were of one mind, and Huang Zhang understood his younger brother's meaning.

"What else can we do but sell to him? Although he's been ruthless lately, he's still been relatively polite to us. Plus, the price he offered is quite good. If we wait another month or two, and he tries to issue new shares, our shares will be worthless."

The shares he still holds are worth over 70 billion yuan, which, together with the shares he transferred previously, brings the total to over 100 billion yuan. This amount of cash can be considered a way of giving back to his entrepreneurial endeavors over the past half of his life.

Huang Zhang is a decisive person. Although he was initially pressured by Tan Jincheng and lost control of the company due to his own greed.

However, once he calms down, he still possesses a very precise thinking ability.

Judging from Tan Jincheng's various actions, it is clear that 51% is just a figurehead. What he wants is the entire company. Even if he holds onto his existing shares, Tan Jincheng will dilute his shares through capital increases and share expansions.

Even if he wanted to sell it then, Tan Jincheng might not want it.

If the major shareholder acts unscrupulously, the minority shareholders have absolutely no recourse.

"Yes, after we get the money, we can do whatever we want. There's so much money. This Boss Tan is really rich."

There's something no one dares to say: if they hadn't tried to use underhanded tactics and had simply let Tan Jincheng acquire 51% of the shares without hesitation, would they have been purged?
The following day, Huang Zhang returned to the hotel to find Tan Jincheng.

When he returned to Tan Jincheng's room, the two never saw each other again. Tan Jincheng had gone to the Meizu to deal with his relatives, and he really didn't want to hear about it in person, afraid that he would lose control of himself.

"Is Mr. Huang going to sell his remaining shares?"

Tan Jincheng was somewhat surprised to learn Huang Zhang's purpose in coming.

But then I thought, this is good too. It saves me from having to go through the whole capital increase and share expansion process, and avoids a lot of trouble.

After a moment's thought, Tan Jincheng said, "President Huang can retain a portion of the shares. I will still honor the promise I made when we first met. Everything I said when we first met was absolutely true."

With Lei Jun's guidance, Tan Jincheng gained a clearer understanding of Meizu, focusing on hardware and software systems to ensure the continued success of the Meizu and Meilan brands.

By combining hardware and software to create a virtuous cycle, Meizu could very well go public.

Huang Zhang smiled faintly: "Forget it, I do want to take Meizu public, but I'll do it myself. But since President Tan has said so, I'll keep some for myself."

After thinking for a moment, Huang Zhang said, "Then let's keep 1.5 points, a little more than Ahri."

1.5 points, that's a complete withdrawal. Huang Zhang's personality is indeed different from ordinary people. Tan Jincheng always felt that this guy was a bit obsessive, but perhaps it was precisely this obsessive personality that allowed Meizu's early development to follow his path.

"Alright, since that's the case, I won't say any more."

With this, Tan Jincheng's shareholding in Meizu reached 78.674%. Allocating 10% of that share to the employee stock ownership plan will help stabilize Meizu's situation as quickly as possible.

Huang Zhang's decisive decision to sell his shares solved many problems for Tan Jincheng.

A pie in the sky is just a pie in the sky; nothing beats a real equity incentive plan that truly motivates people.

Huang Zhang arrived suddenly and left just as decisively. After discussing things with Tan Jincheng, he quickly left the hotel where Tan Jincheng was staying. The rest of the matter was relatively simple, and the two parties quickly transferred the shares.

Meizu has also completed its business registration again, and the legal representative has become Zhao Xinyi. In addition to being Tan Jincheng's personal assistant, Zhao Xinyi has also become the president of Meizu Technology.

Huang Zhang quietly resigned from all his positions at Meizu, and with his departure, it became much easier to deal with his family members.

Although Meizu and ByteDance have kept a low profile regarding the handover of the company, Meizu's every move still attracts a lot of attention.

Founder Huang Zhang and his family have stepped down, Chen Mingyong has been appointed as the new CEO, and Bai Yongxiang, Li Nan and Li Yan have retained their positions.

With a complete settlement with Qualcomm, Meizu's high-end models next year will use Qualcomm's most advanced chips.

The three major systems of Meizu + Qualcomm, Meilan + MediaTek, and Flyme + NIO Pilot have determined Meizu's future. At the same time, the design of the Meizu Pro 7/Pro 7 Plus by Huang Zhang has been completely rejected, and the company has returned to a full-screen design.

Speaking of the Pro 7's design, Tan Jincheng was speechless after seeing it. Not only was it not the mainstream full-screen design, but it also had a small screen on the back. However, apart from showing the time and weather, this small screen seemed to be of no use.

What's the point of this abstract design besides increasing costs?

Furthermore, despite claiming to be a flagship model, the Pro 7 suffers from serious deficiencies in basic functions, lacking even essential features like NFC. How can it compete with such a device?

However, the Pro 7 is not without its merits. Its design is still very stunning, even to Tan Jincheng, a user who has seen and used countless designs ahead of their time, it is still very impressive.

Tan Jincheng suggested modifying the exterior design, removing the unnecessary and cost-increasing secondary screens, adding essential functions, and replacing the most important processor with a Qualcomm one, as well as a full-screen display.

Surprisingly, the opinion given by Boss Tan, who is not a professional, was agreed upon by Li Nan and others. In fact, they were also not optimistic about the original design of the Pro 7, especially the secondary screen, which they strongly objected to. Don't underestimate a secondary screen; it will greatly increase costs and thus affect pricing.

"However, that means the release date will have to be delayed, which is a major change."

The new CEO, Chen Mingyong, also agreed with the boss's suggestions for improvement. He came from OPPO, where both OV and Vivo have surpassed Meizu in every aspect, and he has his own theory on user needs.

The only headache is that this thing is not as simple as changing a design drawing; the entire supply chain and production will be greatly affected.

"Hehe, this is your top priority after taking office. If you need more people, come to General Manager Zhao; if you need more money, come to me. The rest is up to you."

Boss Tan didn't care about any of that. He only gave the specific strategic intentions, and how to execute them was none of his business.

Li Nan, who was in charge of Meizu, couldn't help but smile at Chen Mingyong's helpless expression. He tentatively asked, "What about Meizu? Does the boss have any opinions about Meizu?"

"Meilan? No objection, then let's go with yours."

The Meizu Note series is Meizu's high-volume, budget-friendly phone series, spearheaded by Li Nan. Since Tan Jincheng kept him on and even gave him shares, how could he possibly reject his plans?

In fact, the Meizu Blue series, spearheaded by Li Nan, sold very well. Meizu was able to survive until Geely's acquisition in its previous life thanks to the Meizu Blue series, spearheaded by Li Nan. Back then, Tan Jincheng felt that Meizu Blue was much better than Meizu.

Li Nan, who had been holding her breath, finally relaxed and smiled at Chen Mingyong: "Then Mr. Chen's workload will be much lighter."

The ruthless and merciless actions of the acquired company initially terrified Li Nan and others. However, during the subsequent restructuring process, although Tan Jincheng could not stay in Zhuhai forever, he frequently flew over.

After getting to know him better, Li Nan and Bai Yongxiang found that the new boss was easy to get along with and generous. As soon as the company completed the share transfer, he immediately formulated an employee stock ownership plan, giving up 10% of his own shares to the management and technical staff.

Besides these, the first thing Meizu did after the layoffs was to raise employee salaries. In addition, there were a series of plans to improve employee meals and accommodation. The combination of kindness and severity quickly calmed Meizu down.

The newly appointed president, Zhao Xinyi, is also very capable. After quickly taking control of finances, personnel, and operations, she quickly brought Meizu back on track with the team transferred from Ningbo.

After getting back on track, President Zhao began to sort out Meizu's suppliers; needless to say, another fierce battle ensued.

Regardless, Meizu has finally stabilized, not only for its original management team, but also for the Zhuhai Municipal Government. The Zhuhai Municipal Government has been closely following the process of ByteDance's acquisition of Meizu.

The Zhuhai municipal government did consider intervening, but they were helpless. They also talked to Tan Jincheng, who only said that he would not ruin Meizu, such an excellent company, but some necessary turmoil was still necessary.

"In retrospect, this can be considered a painful but necessary treatment."

Looking at the group of people chatting and laughing, Bai Yongxiang couldn't help but sigh inwardly. Although he had gone from being the president to the senior vice president, he was now responsible for even more business. In addition to working with MediaTek, he was also assigned the task of working with Qualcomm.

Compared to the previous president position, which was largely nominal, the current senior vice president has much more power.

"Everyone, don't ask me everything. I only have this little bit of stuff, and I learned it from Mr. Lei and Mr. Yu. I've told you everything I can. How well it sells next year depends on you guys."

"I'd better go back to managing my cars. Whether Meizu can change, whether it can go public in the future, and whether you can achieve financial freedom are up to you to work hard."

"Haha, Mr. Tan, you're too modest. It's rumored that you're an excellent product manager, and now it seems that the rumors are true. But you're also right, the Weilai is selling so well this year that it really needs you more than Meizu does."

"Haha, don't flatter me. I know my own capabilities. But I had forgotten about it until you mentioned it. We need to get a batch of Weilai cars for Meizu."

Hehe, I guess this is a way to boost sales?
Needless to say, Meizu will purchase all its official vehicles from Weilai from now on.

(End of this chapter)