Chapter 781 Investing in 3 Star Electronics
Chapter 781 Investing in Samsung Electronics
Yang Wendong added: "By the way, how is the investment in Samsung Electronics in South Korea going?"
Fang Xianming replied: “Mr. Yang, I am also going to tell you about this. My people have already met Lee Kun-hee, the son of Samsung founder Lee Byung-chul;
After discussing with him, Lee Kun-hee is willing to cooperate with us, but he is reluctant to sell his shares. He only said that he can make concessions on the price. "
"So he wants to take our orders and channels, but doesn't want to give us shares?" Yang Wendong said, "He has a nice idea. Tell him that if he doesn't agree to sell the shares, then forget it. There's no point in cooperating."
Samsung Electronics at this time was just a small electronics company, while Honor was a top-ranked giant in Asia. Especially after the arcade game became popular, it has gained a certain degree of fame around the world.
In terms of channels, Carrefour and Best Buy are also very good channels, especially the latter, which has a very strong momentum of development in the United States. Although it has been making losses, it does not affect its status as one of the top electronic appliance channels in the United States. As long as personal computers become popular and drive related industries, Best Buy will turn losses into profits and expand faster.
Fang Xianming said: "Okay, but I plan to go to Korea again to meet with Lee Kun-hee."
He also saw that the boss attached great importance to Samsung Electronics. Although he didn't know why, Korea and Hong Kong were not far away. After making arrangements, he could return in two or three days, which would not take up much time.
"Okay, you go and see the other party's bottom line. Is he determined not to sell the shares, or is he just using it as a negotiation condition?" Yang Wendong nodded and said, "If he is determined not to sell, then there is no need to discuss. If not, then we can negotiate seriously."
"Yes, Mr. Yang." Fang Xianming agreed;
The next day, Fang Xianming boarded a Cathay Pacific flight and flew to Seoul, the capital of South Korea;
With the introduction of an insider, Fang Xianming soon saw the purpose of this trip: Lee Kun-hee;
"Hello, Mr. Li." Fang Xianming said in fluent English.
Lee Kun-hee also said in English: "Hello, Mr. Fang."
"Please take a seat." Fang Xianming did not dare to be careless;
Although the size of Samsung Electronics is not that big, the consortium behind Samsung can be said to be the long-term prosperity of South Korea and has the ability to call the shots in South Korea.
It is said that this is also because Samsung's senior management prefers traditional industries and is relatively averse to emerging products such as the electronics industry. They believe that they should stick to their core business. However, Lee Kun-hee insisted on taking a different path, especially in the semiconductor field. This also led to discord between the two parties. Otherwise, Samsung Electronics would not be short of money.
Lee Kun-hee smiled and said, "Although I am in Korea, I have heard about Mr. Yang's entrepreneurial deeds a long time ago. I admire him very much. I hope to meet Mr. Yang one day."
Fang Xianming said: "If we can reach a cooperation agreement, then perhaps I can arrange it."
"Well," Lee Kun-hee paused and said, "Mr. Fang, Samsung Electronics is really willing to cooperate with Changxing Group, but Samsung Electronics does not belong to me personally, but to Samsung Group. I do not have the right to directly sell the shares of the branch company. This requires the approval of the board of directors."
Fang Xianming said, "I know this, but what I want to know now is whether you agree, Mr. Li. If you agree, we can work together to find a solution. If you don't agree, then I think there is nothing to discuss."
"Do we have to buy shares before we can cooperate? Why do you have to buy shares in our company?" Lee Kun-hee was also puzzled. Samsung Electronics is not weak now, but it is not strong enough to compete with international giants.
Fang Xianming said: “I don’t know what the boss means, but I guess it’s because once we cooperate, Changxing Group’s large overseas sales resources will be tilted towards Samsung Electronics, including your various home appliances and even semiconductor products, which we will also try to purchase;
We usually only offer such favorable conditions to our own invested companies. You also know the situation of our group's overseas channels. With such an investment, we naturally hope for a higher return."
After years of hard work by Yang Wendong, Changxing Group's strongest point is its overseas channels;
Hong Kong movies are now popular in Asia because there are more than 2000 theaters overseas, which has promoted the explosion of the Hong Kong film industry and greatly improved the quality, thus even breaking into some countries and regions that do not have their own theaters;
In other areas, such as home appliances, Best Buy invested heavily in the United States, even at a loss;
In the automotive industry, the company has invested in large-scale auto retail stores in Southeast Asia, with the number of stores reaching hundreds. Even Japanese auto giants have to sit down and discuss cooperation with Changxing Group every year.
In addition, there are various light industrial daily necessities. Relying on Carrefour, Walmart in the United States, some European supermarkets, etc., Changxing Trading Company has become one of the largest trading groups in Asia.
"Does it include Best Buy?" Lee Kun-hee asked;
Fang Xianming nodded and said, "Yes, including Best Buy, but Best Buy's main market is the mid-to-high-end market, and Samsung Electronics' current products may not be suitable."
"That doesn't matter. I was planning to enter the mid-range home appliance field anyway. I'm not content with just making black-and-white TVs." Lee Kun-hee said, "If I can get a stable position at Best Buy, then I'll be more confident in making color TVs, mid-range and high-end refrigerators and washing machines."
Fang Xianming smiled and said, "That's even better. It's mutually beneficial, but the prerequisite is that you still have to agree to our conditions."
Although Honor Electronics also has home appliances, this industry is too big. A mall as big as Best Buy cannot only sell Honor. The others are all competitors, so having Samsung doesn’t matter.
Besides, he also knew that Honor's main focus in the future would still be in the fields of personal computers, game arcades, etc., and home appliances were just one of the company's businesses.
After thinking for a moment, Li Jianxi said, "Then how many shares do you hope to obtain?"
"30%." Fang Xianming said loudly.
Li Jianxi shook his head quickly: "Too much, the board of directors will not agree to it, at most 10%."
Fang Xianming said: "10% is too little. What's the point of investing so little? At least 20%?"
This is also Yang Wendong’s request, but everything still needs to wait until everything is discussed here before the boss can make the decision personally.
Li Jianxi frowned and said, "Well, let me go back and discuss with the board of directors. Can you give me a list of resources you can provide? It doesn't need to be very detailed, just a rough outline will do.
After our board of directors agrees, we can discuss the details of the cooperation, how about that? "
Fang Xianming smiled and said, "Okay, no problem."
He had already prepared the information in this regard. After the negotiation, Fang Xianming was not in a hurry to inform Yang Wendong of the news. After all, the other party's board of directors had not agreed yet. Without definite news, he would not disturb his boss.
Then I spent two days in Seoul and found that there are so many Chinese characters here. Even if I don’t know Korean, I know which store to go to.
On the other hand, Lee Kun-hee found his father Lee Byung-chul and told the outside world that Samsung was controlled by the board of directors, but in fact, it was completely the Lee family that had the final say. Unless the company suffered huge losses under the management of the Lee family, other shareholders would be likely to speak out.
"Changxing Group." After hearing his son's report, Li Bingzhe said coldly, "This is a large financial group in Southeast Asia. Although its founder is young, his achievements are not inferior to mine, and its industries are also spread across Europe and the United States. Are you confident in cooperating with such a person?"
Li Jianxi said: "Father, I delayed the negotiation with the other party before, and sent people to Southeast Asia and the United States to investigate. I also confirmed that Yang Wendong had cooperated with many different companies, and it was basically a mutually beneficial model;
Changxing Group invests in the other party's company and provides funds and resources to help it grow, and then shares the profits. "
"We are not short of funds. As long as you can make qualified semiconductors, I will support you," said Li Bingzhe.
Li Jianxi said: "I know, father, the funding is easy, but what we lack most is overseas channels. Our TVs sell very well in China, but it is difficult abroad. Changxing Group has very strong channels for home appliances overseas.
Once the cooperation is completed, we will instantly have high-quality traffic stores in nearly 100 major cities in the United States, with complete after-sales service; if we were to operate this on our own, we would not know how much it would cost, and it would take at least 5-10 years, and we might not even be able to do it well. "
"His Best Buy is indeed very good, but as far as I know, this project has been losing money, which is why I am not optimistic about it." Lee Byung-chul had obviously done his homework.
Li Jianxi said: "Yes, I know, but Yang Wendong is still supporting Best Buy's expansion. I think he should have his own ideas. As long as it can't be closed in the short term, it's fine. For us, the US market is very important, and it will also be a rare opportunity for us to enter the mid-to-high-end home appliances market.
In terms of semiconductors, although there is some demand within the group, it is still far behind Honor, which specializes in home appliances and electronic products. If our semiconductors can be supplied to Honor Electronics, it can be regarded as a successful expansion abroad.”
"After saying so much, it seems that you are very moved." Li Bingzhe said.
Li Jianxi nodded: "Yes, this is an opportunity for Samsung Electronics. Although we will give up some shares, we all understand that any company that wants to expand its scale, especially to develop overseas, will definitely have its shares diluted.
It’s the same now. It would be a pity to give up such a good opportunity.”
Lee Kun-hee is the second son of the Lee family. The group is influenced by ancient Confucian culture, which generally follows the principle of eldest son, which means that his eldest brother is the successor of Samsung Group.
Therefore, in order to seize that glimmer of hope, he must take an unconventional approach and achieve results in the field he is optimistic about, so that he can have a chance to become the successor of Samsung.
After listening to this, Li Bingzhe pondered for a moment and said, "Okay, then you can negotiate with the other party. You can decide the investment ratio. The investment amount is not important. I have no shortage of funds. What you need is for the other party to invest in the company through various channels or provide technical assistance. Only in this way can we develop rapidly."
"Yes, father, thank you for your support." Lee Kun-hee stood up and bowed excitedly.
Lee Byung-chul said, "This is your own choice. Just like you insisted on making semiconductors before, as a father, I also hope that you can make achievements in the field of electronics and open up a new market for Samsung Group. Especially in the export field, you must do well. The future of Samsung, in the hands of your generation, must go abroad."
As the founder of the group, Lee Byung-chul was also aware of Lee Kun-hee's ideas, and he supported them.
As for Samsung, it is like his third son to him. He also hopes that Samsung can develop better, and this requires a strong successor.
After getting the permission, Lee Kun-hee immediately arranged another meeting with Fang Xianming;
After Fang Xianming learned that the shares were negotiable, he said with satisfaction: "Okay, Mr. Li, as long as the intention can be resolved, then the subsequent negotiations will be easy. It's just that you are only willing to give 15% of the shares, which is still a bit low."
Li Jianxi said: "Mr. Fang, Samsung Electronics may need to introduce other shareholders in the future, and may also go public, so it is not appropriate to sell too many shares in the early stage."
Fang Xianming smiled faintly and said, "Mr. Li, with the after-sales resources of my Changxing Group, your company will not need to introduce other shareholders within five years."
Lee Kun-hee said: "I believe this, but I am not just looking for channel resources. We in Korea also need to consider the ZZ aspect. Samsung Group has been able to grow bigger, and it has actually made great concessions in this regard."
"Well, OK, I'll go back and report. If there are no problems, Hong Kong Glory will send a professional team to communicate with you." Fang Xianming finally nodded;
Changxing Finance is responsible for the financing negotiations, but after the intention is reached, the subsequent cooperation will have to be negotiated by each subsidiary itself.
Li Jianxi said: "Okay, I will entertain the friends from Honor Electronics with the most grand standards."
South Korea and Hong Kong are basically in the same time zone. That afternoon, Yang Wendong received a call from Fang Xianming. After listening to the call, he said, "Let's just take 15% first. If you want to continue to increase your shares in the future, you can consider it again, or wait until Samsung Electronics goes public."
It is still a long time before Samsung Electronics dominates the world. There is no need to rush. He may even cash out a large part of his shares before the Asian financial crisis in 97, and then wait for the Korean economy to collapse after 98. That would be the best time to buy at the bottom, and it would not just be Samsung Electronics.
Fang Xianming agreed: "Okay, then I will contact Mr. Wang and ask him to arrange for someone to come to Korea."
"Okay, let him reach an agreement with Samsung Electronics as soon as possible." Yang Wendong said.
Their own electronics companies may be able to achieve certain results in the mainland, but it is difficult to succeed in overseas markets without giving half of their profits to Wall Street like Samsung did;
Then investing in part of Samsung Electronics would also be a good choice.
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(End of this chapter)