Chapter 640 History Repeats Itself: Jardine Matheson’s Goal

Before 71, the head of Jardine Matheson was John Keswick, but since the beginning of this year, the top management of Jardine Matheson Group has been replaced by Henry Keswick;

As the family behind the Jardine Matheson Group, the heads of core enterprises including Hutchison Whampoa and Wharf Holdings are basically from the Keswick family, but there are a few exceptions. For example, in the 80s in the previous life, the head of Jardine Matheson was a foreigner named Newbigin. It is said that this involved a very big internal struggle. Newbigin won the Keswick family. Just looking at this point, we can see his ability.

There are actually many powerful British people in Hong Kong. Qi Dezun is one of them, as is Newby, and Ma Shiming in the future will not be bad either. Among these idle and sufficient groups of people, there will always be powerful people emerging.

British capital in Hong Kong has gradually declined. The fundamental reason is that the descendants of the controlling families have limited abilities. This is actually the same for long-standing Chinese, European and American families. The only exception is Japan. Large Japanese families or conglomerates will use their own daughters to attract highly capable sons-in-law, thereby ensuring the family bloodline's control over the company and avoiding a certain degree of "wealth cannot last for more than three generations."

Fang Xianming said curiously, "Henry Keswick came to you at this time. Did he know that we were targeting Wharf? But that shouldn't be possible. All our actions are kept strictly confidential. Not even a few people inside know about it. Moreover, I have also acquired many shares of other British companies in order to avoid the target being too clear and known to insiders."

"From his tone, it doesn't seem like it's about Wharf." Yang Wendong thought for a moment and said, "Let's go meet him first. Maybe this Henry Keswick has just taken over the Jardine Matheson Group and wants to have a good relationship with other financial groups in Hong Kong. It's possible that you can come with me."

Fang Xianming said: "Okay."

On the third day, March 3, Yang Wendong brought Fang Xianming and some bodyguards and assistants to the Mandarin Oriental Hotel, which is also the hotel property of the Jardine Matheson Group in Hong Kong;

As the largest British real estate in Hong Kong, Jardine Matheson's investment in hotels seems to be just for fun, rather than operating as an industry. Even in the next few decades, including the mainland, Mandarin Oriental will only have about 40 hotels in total, which is not a lot.

This model is actually not wrong. Investing in building hotels by yourself is too costly, and you have to open them in different countries and cities. The risk is too high and the management cost is the same. Only the franchise model of InterContinental and Hilton is the most suitable industry model. However, it is very difficult to achieve this. The market has long been snatched away by these European and American brands. It is difficult for latecomer brands to have the opportunity to gain the trust of capital in most parts of the world.
Even for the Four Seasons Hotel, Yang Wendong did not dare to say that it would be successful. If it really did not work out in Europe and the United States, then he would just operate it seriously in the mainland in the future. Although it would cost a little more to build it in the mainland in the early days, in the earliest days of the mainland, only formal projects could legally and reasonably obtain commercial land in the city center of any city. This was the most cost-effective, although a joint venture might be required at the beginning.

After entering the presidential suite on the top floor, Yang Wendong saw two white people, one was Henry Keswick and the other was a middle-aged man about 40 years old.

"Hello, Mr. Yang. I have heard of you for a long time." Henry Keswick smiled and stepped forward, extending his right hand. He said in fluent Cantonese, "You are also a very successful and well-known person in the UK. Many officials in the British political circle are very optimistic about you."

As the boss of Jardine Matheson Group, or any senior executive of a British group doing business in Hong Kong, it is basically necessary to know Cantonese, and you even need to be able to read Chinese characters, otherwise you are not qualified at all. This is even a rigid requirement. Maybe it was not necessary a few decades ago, but now that Chinese capital is rising in Hong Kong, the British also need to pay attention to the Chinese.

Of course, there are very few exceptions, such as the Governor of Hong Kong Murray MacLehose, who was suddenly transferred to Hong Kong and naturally did not understand Cantonese or Chinese characters. It is said that he has been learning and it is estimated that he will be able to communicate basically in two or three years.

Yang Wendong also shook his hand back and said with a smile, "Thank you for the compliment, Mr. Keswick."

"Please sit down." Henry Keswick pointed to the sofa next to him, and everyone sat down.

The hotel waiter immediately came forward to make tea. This short period of time was not suitable for discussing business, so the two sides exchanged some small greetings.

After the waiter left, Henry Keswick said, “Mr. Yang, I invited you out today because I wanted to discuss with you face to face the development plans of our two groups in Hong Kong in the next few years;
After all, you and I are now the largest Chinese and British-owned groups, with overlapping businesses in many areas, and we have even had fierce commercial competition in the past;

Although this is normal, after all, Hong Kong is so small, and it is normal for big conglomerates to compete, but I still hope that vicious competition can be avoided. It is most important for everyone to choose the right direction and earn their own interests, right? "

"I agree with this point. I wonder how Mr. Keswick plans to arrange this matter?" Yang Wendong said with a faint smile.

Although the historical descriptions of many commercial mergers and acquisitions in the past seem to be brilliant, in fact, if it is not necessary, few people are willing to go through so much trouble to launch merger wars or vicious competition, because the cost is too high. It is best to do business peacefully and amicably.

Unless the interests are too great, for example, Chinese capital in Hong Kong wanted to develop in the 80s, but the British capital that once monopolized everything blocked the way, so there were many well-known cases of acquisition wars. Of course, hedge funds and investment banks whose core profit is acquisition are exceptions. These companies wish for chaos in the world so that they can profit from it.

Henry Keswick smiled and said, "That's easy. Today, the most profitable industries in Hong Kong are shipping, real estate, finance, and trade. Among them, the one that may cause us the most conflict is real estate. In the Hong Kong government's many land auctions, Jardine Matheson and your company have competed with each other.

Regardless of who wins or loses in the end, we have all paid a higher price, which is not a good thing for you and me."

"This kind of competition is normal. Even if you're not here, I have others." Yang Wendong asked again, "Do you mean that you and I should reach a tacit understanding before each auction? I'm afraid that's difficult."

In fact, there are some similar cases. Many different consortiums are like this, but many times the interests involved cannot be coordinated, and the final result will be determined at the auction. If it were that easy, the Hong Kong government would not be able to make a living.

Henry Keswick said: “Yes, it is difficult, but we don’t need to pursue reaching an agreement every time. For example, if you and I both want a piece of land, if one party wants to hold it for himself and the other party just wants to build it and sell it, then after proper negotiation, the party who holds it for himself should have priority.
If both parties are ready to sell, purely for profit, then both parties can discuss a joint venture ratio, or you can sell it this time and I can sell it next time;
If both parties want to keep the property themselves and there is really no way to negotiate, and both parties want it, then we can see who is willing to pay a higher price at the auction. Even if the deal fails, we will not lose anything. If the deal succeeds, it will be better. Maybe every deal can save tens of millions of dollars for both parties."

"What you said makes sense. This is indeed a good deal." Yang Wendong nodded.

In the real estate business, it is indeed impossible for all consortiums to negotiate how to distribute the shares, but the two large consortiums that are ranked high and often compete can negotiate in advance to avoid vicious competition;

Even though Changxing Group may be slightly stronger than Jardine Matheson in terms of assets today, it does not necessarily win every real estate auction as there are too many factors that influence such matters.

"That's good. After the next auction and the Hong Kong government announces the land information, we will send our men to discuss it first. If it is not of extremely high value, our approach will definitely save a lot of unnecessary waste." Henry Keswick said with a smile.

"Okay." Yang Wendong agreed. Although he might soon have a feud with Jardine Matheson in the future, the miraculous thing was that it might not affect other businesses.

Business is like politics. There are no eternal enemies or eternal friends. Even if you rob Wharf, the relationship may be bad for a few months at most, but it can be restored to normal at any time. As long as it is profitable, some businessmen are not afraid of being hanged, not to mention some conflicts in the past.

Relatively speaking, Chinese families may care more about their own family businesses. If a dispute occurs, they will hate it for the rest of their lives, and there may even be physical retaliation. Therefore, whether for their own safety or for the sake of their own top Chinese consortium, they will not take the initiative to forcibly acquire the businesses of other Chinese families. At most, they will invest for mutual benefit or help the shareholders of one party.

Henry Keswick paused, then continued, "Mr. Yang, there is one more thing I need to tell you in advance. I hope you will try your best to keep it a secret for us, whether you agree or not.

We, the Jardine Matheson Group, are preparing to launch a merger and acquisition of a Chinese-owned enterprise."

"Chinese-funded enterprise?" Yang Wendong's heart moved. Could it be that Jardine Matheson was preparing to take action against Dairy Farm International in advance?

But it is normal to think about it. Such a large acquisition plan is definitely not a sudden decision. In history, Swire Properties initiated the acquisition notice of Dairy Farm International in October 1972. Now, due to its own influence, Hong Kong history, both real estate and finance are stronger than in the past. Coupled with the uncontrollable butterfly effect, it is not abnormal that Jardine Matheson took a fancy to Dairy Farm International earlier and prepared to take action earlier.

Dairy Farm International has a century-long history and in its early years it raised cattle. This agriculture naturally requires a large amount of land, just like Watsons in Sha Tin. The difference is that Dairy Farm International raised cattle in some areas of Hong Kong Island in its early years. It is conceivable that the value of these lands is very high today. Even Yang Wendong is very optimistic about this company.

Dairy Farm International was founded by a British man in its early years to provide milk to Hong Kong citizens. However, over its century-long operating history, it was gradually controlled by Chinese capital and eventually controlled by Sir Chow Sin-nin. This was a very rare transfer of Chinese and British capital, which happened silently without any conflict.

Henry Keswick said, "Yes, our target is Dairy Farm International. Mr. Yang should also know about this company. They also have some business conflicts with your Watsons, so I hope that when we take action, Changxing Group will not interfere."

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(End of this chapter)

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