After looking at the top ten retail companies, everyone talked about Da Shang.
Then, Li Dong looked down and saw Baijia. Li Dong knocked on the table and said, "Baijia does not have a lot of business in China. Most of their business in China is concentrated in Southern China.
In Southern China, Baijia's revenue is 4 billion RMB. It's not low, but it's not strong either.
Baijia's strength is in Hong Kong and Macau. In Hong Kong and Macau, Baijia's revenue is more than 12 billion RMB, and they have a high market share.
In China, there are not many retail companies with revenue of more than 10 billion RMB, not to mention in Hong Kong and Macau.
That's why we are acquiring Baijia not because of its business in China, but because of Hong Kong and Macau.
However, He Huang is also rich, and even if we can reach an agreement on the acquisition, the other party's offer will not be low.
This time, when we made the acquisition offer to Baijia, there are also other companies that extended an olive branch, including many international retail companies. They also hope to enter Hong Kong and Macau.
The competition in Hua Xia's domestic market is too fierce, but Hong Kong and Macau are still acceptable.
Also, as a bridgehead, we can spy on the domestic market and enter Hua Xia at any time.
Last night, I called Old Li's eldest son and talked to him. The other party's offer is not low. Although they said it was someone else's offer, it is obvious that the other party's price is very high.
3.5 billion USD, 24 billion RMB … "
When everyone heard this, Chen Lang frowned. "This price is too high!
In the past, Carrefour's business was much stronger than Baijia's, and its revenue was even twice of Baijia's.
Now, Baijia's revenue is only 16 billion RMB, even including China's.
Also, Baijia does not have many properties, and most of them are shopping malls under He Huang. This acquisition does not include these commercial real estate projects.
A simple department store is asking for 24 billion RMB. Do they really think our money is not money?
Also, Baijia's profit margin is not high, only 6%. Based on last year's revenue, even if we made a profit of 1 billion RMB.
If we spend 24 billion RMB to acquire Baijia, the return on investment will only be a little more than 4%.
Of course, just looking at the return on investment is not enough. After all, our retail business in Hong Kong and Macau is empty, and it can bring us a lot of value.
But if the return on investment is less than 8%, it's not worth it for us.
Acquiring the other party for around 12 billion was an acceptable price. Even if there were additional effects, the added value would not exceed 20%.
In other words, 14 billion RMB is the highest price we can afford.
Now, the other party is asking for 24 billion, which is 10 billion more. Director Li, I don't think the other party is sincere.
With this kind of price, no matter how we negotiate, it will be very difficult for us to negotiate. "
Yuan Chengdao also nodded and said, "Indeed, Top 100 isn't worth 24 billion. Even though we spent a lot on Gome back then, Gome is Hua Xia's number one retailer, so it has a different meaning. Baijia was not even the first in Hong Kong, let alone in the mainland market. He Huang's appetite was frighteningly big if he wanted 24 billion yuan. When a business acquisition meets such an opponent, it usually means that the other party is not sincere and will use a high price to chase away those companies that want to participate in the acquisition. General Manager Li, the other party should not have considered whether to sell Baijia or not. "
The others also said that the price of 24 billion was indeed a little too high.
So far away only spent a little more than 10 billion to acquire Carrefour, and Carrefour's revenue was twice that of the other party.
Moreover, both companies did not have too many properties, which was also a very important point.
However, at that time, Carrefour was in a precarious situation and was greatly ostracized in Hua Xia. In addition, So far away was suppressed in the mainland, so the other party could be said to be selling at a loss. So far away was a bargain.
However, even so, with about half of the other party's revenue, the price of Baijia would not be so high.
Li Dong listened for a while, then suddenly said, "If we were to acquire Big Shang now, I mean their retail business, how much do you think would be enough?"
As soon as this was said, the expressions of the others changed slightly.
Chen Lang thought for a while and said, "We don't know much about Big Shang, including their profitability, debt ratio, the proportion of their properties, and some other parameters. We are not very clear about them. In the past, we did not do much research on Big Shang. However, according to what I know, Big Shang's profit margin is not too high. They use the method of small profits but quick turnover, which is also one of the reasons why their revenue is so high. "According to the disclosed data, 75 billion revenue, 6% profit, and about 10% of their properties, debt ratio below 20%. If we want to acquire Big Shang's retail business, it is almost impossible for it to be less than 50 billion. "
The moment this was said, many people felt their teeth hurt.
Li Dong said helplessly, "More than 50 billion, is it that high? Gome probably spent that much money … "
Everyone was speechless. The situation was different.
Back then, Gome was in a crisis and Far away took advantage of it.
In fact, it was not only Gome and Carrefour, Far away usually took advantage of others when they were down. All the companies that Far away acquired didn't have a high price.
However, Big Shang was living a good life now. They dominated the northeast and no one could compete with them.
Under such circumstances, the price to acquire Big Shang wouldn't be small.
Furthermore, for these retail companies, regardless of whether they were listed or not, their market value didn't mean anything. They still had to look at their actual value.
Unless you cooperated with them and could create a complementary effect with them, they might use a low price to let you enter the market.
However, if you just wanted to acquire them, you would have to pay a high price.
Li Dong rubbed his chin and thought for a while before saying, "According to your standards, Big Shang is worth up to 50 billion. What about Wumart? You have to know that Wumart's price wasn't too high. Back then, they wanted to replace our Beijing store and gave us 25% of the shares and 1 billion in cash. Wumart's actual price was just over 10 billion. With Wumart and Keikelon, their revenue this time wasn't low either, reaching 43 billion … "
Chen Lang interrupted, "General Manager Li, this is different.
Furthermore, Wumart's debt ratio isn't low. Back then, because they had too much debt, the bank refused to lend them money. Wumart gave up on the merger era and we took the lead.
As for Big Shang, although we didn't do any research, their situation is definitely much better than Wumart's.
Also, Wumart's profit margin isn't high. Big Shang is the dominant force in the northeast, while Wumart needs fierce competition in Beijing.
Also, at that time, we didn't have to pay. Moreover, the other party could form an alliance with Far away, which was why they paid such a price.
However, if you want to acquire the other party, it's not that easy.
If you want to acquire Wumart, without more than 15 billion, there's no hope.
This is also based on the other party's willingness. If you can't reach an agreement and ask for 20 billion, it's normal for Wumart to refuse.
In short, if you want to rely on funds to forcefully acquire them, you will definitely have to spend more money.
If Big Shang and Wumart want to complete the acquisition and become the dominant force in the north, the group will need to prepare at least 70 billion.
The premise is that it's a full acquisition. If it's just a simple shareholding, the price will be much smaller. Shareholding and acquisition are two different concepts … "
As a former king of mergers and acquisitions, Chen Lang had acquired many companies in China Resources, especially Suguo, which allowed China Resources to rise in the retail business. It was an existence that couldn't be ignored in Hua Xia's retail industry.
Even if the materials he said were not accurate and the evaluation was not very accurate, as long as the other party's actual situation was similar to his estimation, the price should not be too different.
70 billion. This was the price Far away had to pay to open up the northern market.
In addition, Far away's previous investments in the north and Carrefour's investments in the north when they acquired Carrefour.
In the end, Far away wanted to complete the layout of the northern market and become the absolute number one, and it would definitely cost more than 100 billion.
Li Dong had a slight headache. He had not started to expand internationally, and he had not thought about acquiring the major retail groups that he had been targeting before.
Just Big Shang and Wumart alone would cost 70 billion. This was the best case scenario. If he wanted to complete his plan, he would not even need 300 billion.
Seeing that Li Dong was deep in thought, Chen Lang couldn't help but say, "General Manager Li, don't tell me you really want to discuss the acquisition with the other party?
Actually, in my opinion, it's not worth it to acquire these companies now.
Our business is already very wide, and if we carry out the acquisition as a whole, many of our resources will overlap.
If we split up the acquisition, I'm afraid that these companies will not agree to sell even if they want to.
When we acquired Carrefour, our resources overlapped a lot and we had to close some stores.
But at that time, Carrefour's price was not high, and we could still accept it.
Now, Big Shang and Wumart are different, and we have to take the initiative to propose the acquisition. We will have to bear the waste of resources. "
Li Dong interrupted, "Let's not talk about this first. If we complete the acquisition of Baijia, Big Shang, and Wumart, then we will have a perfect layout in the north, northeast, south, and northwest regions. We have already done a good job in Central, East, and Southwest China. If the layout in the other four regions is perfect, we will be invincible in the country. No, we still have to include the Martial and Commercial Alliance in Central China. After completing the acquisition of these four companies, will we be invincible? "
Chen Lang bitterly smiled. "Invincible in terms of performance, but the premise is that we can successfully integrate them.
Let's not talk about other things, at least in the department store business, no one can surpass us.
But to acquire these four companies, we will need at least 100-120 billion.
This is even more than the total value of our retail group!
General Manager Li, this is actually not worth it. Let's not talk about the cost, it will be too much for the group to merge with so many companies at once. Far away's retail group might not even be able to complete the integration.
Let's not talk about the money. Just the integration alone will take at least one to two years. "
"More than 100 billion. With the four companies combined, it will be 180-200 billion in revenue …"
Compared to Far away, it does not seem to be worth it.
Far away's retail group does not include the online group. With the addition of Gome, their target for this year is 300 billion.
Far away's retail group is only worth a little, and some people doubt Li Dong's estimate of 100 billion.
Now, the other party's own property ratio and profit margin may not be better than Far away. Using more than 100 billion in funds to exchange for about 200 billion in revenue seems to be a big loss.
However, Far Away's current results were slowly growing in the later stages. If they were to forcefully acquire them now, they would naturally have to pay a higher price.
Li Dong knocked on the table again and muttered, "After acquiring these four companies, our offline retail revenue should be able to reach the 500 billion mark this year. 500 billion … "
Yuan Chengdao, who had roughly guessed Li Dong's goal, could not help but remind, "Even if we can reach 500 billion in revenue, if we are not picky about this kind of acquisition, even if we complete the acquisition plan, our costs will rise, and the profit margin will fall again.
In the end, the profit margin will probably be less than 5%.
It might even be lower!
The scale is big, but it might not be much better than the previous profits.
We, on the other hand, used 100 billion!
Even if we put these funds in the bank, I'm afraid the return rate will exceed this.
General Manager Li, think twice! "
5% seemed quite good, but in fact, it was terrible.
For a big company, a return rate of less than 10% was not worth investing.
Of course, retail companies could provide more cash flow, and the profit margin could be slightly lower. But if it was less than 5%, it was definitely not worth it before the impact of the e-commerce industry.
Was there really any meaning to a simple increase in revenue?
At least in Yuan Chengdao's opinion, there was not much meaning.
With this money, they could do a lot of things. They could also choose some suitable companies to acquire, and not just buy those with high performance and local strength.
Also, where could they get 100 billion in funds? Far Away?
Even if they could get a loan of 100 billion, in the end, all the money earned by the acquired companies would become the bank's interest. So far Away, there would be no real profit. Was it necessary?
Not only did Yuan Chengdao feel helpless, but Chen Lang also roughly understood what Li Dong meant. He frowned and said, "General Manager Li, overloading the operation is actually not that meaningful. If it was just for the first place, we would already be first now. When other companies encounter a crisis, and the other party has the value of acquiring them, we can enter the market regardless of the cost. But now, the other companies have not encountered a big crisis, and entering the market regardless of the cost is not in line with our expectations. "
Both of them tried to persuade him, but Li Dong smiled and said, "Sometimes, don't just look at the benefits in front of you. If the acquisition succeeds and is included in our system, Hua Xia's side, other than South China, will have some competitiveness, and the competition in other areas will be appeased. In 2009, we can achieve 500 billion in offline revenue, and in 10 years, we can double it. Of course, this possibility is a little low. In the early stages of the company's development, we can not aim to make money … "
His words about the early stages of the company's development made everyone present dumbfounded.
At this time, the early stages of the company's development?
So far away, they had already reached this stage. Logically speaking, they should aim to make profits and not blindly expand the scale.
Unless Li Dong really wanted to become the world's retail number one. Otherwise, blind expansion at this time was not worth it in everyone's eyes.
Li Dong did not care what they thought, and his tone quickened. "Actually, we can still give it a try. Even if we can't do it now, we can continue to negotiate in the future. 100 billion to acquire four companies, in my opinion, is not unacceptable. As for the funding … let's talk about it first, and then we'll talk about it after. "
Such irresponsible words made everyone speechless again, and some even rolled their eyes.
100 billion, you don't have a single cent now, and you dare to say that!
If the deal really went through, and there was no money to pay in the end, who would pay?
Once such a situation occurred, then So far away would become the laughing stock of the world.
So far away had been bluffing all along, trying to look impressive at their own cost, right?
Since they had no money, why were they still talking about mergers and acquisitions everywhere? They were too free.
At this time, no one in the room continued the conversation, and no one knew how to continue.
In short, no one could figure out what Li Dong was thinking.
Just as the atmosphere fell into an awkward atmosphere, someone suddenly said, "General Manager Li, there is a small-scale demonstration in Jiangcheng in central China. More than 50 employees So far away have gathered at the headquarters in Jiangcheng, and they are asking us to raise their salaries and reduce their working hours … "
"General Manager Li, there is also some situation in Shanghai. Several former Carrefour executives and the management who left brought along the employees of Carrefour to ask us for an explanation. Especially the executives who left, they are now asking us to compensate them for their losses. Director Sun and Director Wang have already gone to deal with it … "
"General Manager Li …"
The people who answered the phone at the side reported at this time.
Meanwhile, Li Dong and the others heaved a sigh of relief.
There were not many places where it happened, a total of eight places, including the evacuated places in Beijing. There was a total of about 300 employees and management who were involved.
Compared to the scale of hundreds of thousands of people So far away, 300 people was considered a small proportion.
Previously, everyone was worried that there would be a demonstration of thousands or even tens of thousands of people. Now, it was only scattered in some areas, and it was much better than everyone expected.
After listening to their reports, Li Dong stopped talking about the merger and said loudly, "Tell the local people in charge that the employees and management who left, don't even think about getting a single cent!
Don't be courteous with them, get the police to take action. In broad daylight, illegal gatherings and demonstrations are all illegal!
As for the employees So far away, get someone to appease them first. If they still don't leave, don't be courteous, fire them directly, and don't get a single cent of compensation. If they want to sue, let them sue!
So far away has done so much. If they want to defeat So far away with just a few hundred people, they are underestimating So far away.
Furthermore, we did not do anything wrong to them. So far away's salary and benefits are not worth them participating in illegal gatherings.
As for the problem of working hours, I am very clear about this. Get someone to keep an eye on it. Some places have deducted the overtime pay of their employees, and this is not fake.
If there is really an increase in working hours and they do not get overtime pay, then we will take full responsibility and definitely give everyone an explanation.
But if they get overtime pay and still tell me that the working hours are too long, then I will quickly get them to scram!
I did not let everyone work overtime for free, and that's good enough for them.
Let them go out and ask around, how many companies have really reached the point where overtime pay is really paid?
If they don't want to work overtime, then don't work overtime. There are many people who want to work overtime, but they don't want to work overtime and complain about the low pay. Do they really think that So far away is a welfare home? "
Li Dong cursed as he explained his plan of handling the situation.
This time, if there were tens of thousands of people participating, then Li Dong would have to consider the consequences. At this time, he would have to throw out a series of new welfare policies.
But there were only a few hundred people in the entire country, and half of them were people who had left previously. So far away employees who really participated were only about a hundred people.
With such a scale distributed all over the country, it would be strange if Li Dong was polite to them.
As a business, it was impossible to say that it did not exploit its employees. But if this exploitation was suppressed to the lowest level, to the point where everyone could accept it, then it would be considered a success.
There were hundreds of thousands of employees, and only a hundred people were not satisfied. This ratio was not enough to affect anything.
This time, when Li Dong resolves this forcefully, Yuan Chengdao and the rest did not have any objections. Blindly appeasing the employees was not a good thing. Since the scale was not large, it meant that the situation had been suppressed.
At this time, if they suppressed the rest of the people, they might be able to reduce the impact to the lowest.
While they were relieved, they were still thinking about Li Dong's words.
In 2009, in order to let So far away's offline retail revenue exceed 500 billion, Li Dong might really implement his plan to acquire the four companies mentioned above.
Most importantly, from a professional manager's point of view, it was really not worth it.
What was Li Dong thinking?
Even if he was rich, this was not the way to play. Did he really think that he could get first place in the world's top 500?
If he could not get first place, what was the difference between second place and tenth place?
As they thought about it, Yuan Chengdao, Chen Lang, and the rest looked at each other and felt a headache. Couldn't this guy really stop for a few days?
Those bastards who previously called for Li Dong to return were all people who did not have a backache. Once this guy came out, they would be the ones in trouble.
He had clearly said that he would rest for a few days after he was done with the current matters, but in the end, he had probably forgotten what he had said. Could it be that he was going to say that "everything will be fine in the future" for another ten years?
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