Li Xuan spent nearly $5 billion in cash in 1983 to complete the acquisition of RCA. This shocking acquisition has long been written into Harvard's MBA program as a classic case.

Don't look at the total assets of RCA at the beginning, which were far inferior to the Oriental Group, but as a century-old store, it has a heritage that is far from being comparable to that of an upstart like the Oriental Group. The transfer of RCA's TV production capacity alone has made the Shenhai Special Economic Zone the largest electronics industry base in China.

The accumulation of RCA in the field of LCD, CCD and other technologies has laid a good foundation for the Oriental Group to catch up with Japanese enterprises in the fields of LCD and digital in recent years. And RCA is like Doraemon, it has much more good things in its pocket.

RCA also has a strong presence in satellite technology and has long been an important contractor for the U.S. Department of Defense and NASA. Professor Zhao Weiming, the current president of SUSTech, worked with other members of the team to develop a microprocessor called RCA1802 when he was working at RCA.

This 8-bit RCA1802 processor is not only the originator of the RISC (Reduced Instruction Set) architecture, but also the world's first chip that can meet the harsh environment of high radiation in outer space. This RCA1802 chip was later used as the main chip in the Voyager 1 space probe launched by NASA in 1977.

However, in order to persuade the US authorities to agree to its merger plan, the Eastern Group offered to divest all of RCA's sensitive businesses. Therefore, the space division of RCA was sold to Hughes a few years ago. However, at the same time that RCA sold most of its space business. The R&D department for commercial communication satellites was deliberately retained.

RCA was the first company in the world to develop a dual-band communications satellite and the first company to use an all-solid-state communications satellite. The first communications satellite developed by RCA, Satcom-1. As early as 1975, it was successfully sent into space and began commercial operation. After the completion of the acquisition of RCA, the company's global communications division. It has a global satellite communications network consisting of 7 satellites.

In the deal reached between RCA and Hughes, Li Xuan did not need cash, but directly replaced Hughes's communication satellite business with RCA's aerospace division. After the completion of the transaction, the newly established Oriental Satellite Communications Company has increased its number of communication satellites to 12 at once, and has become one of the world's largest satellite communication service providers.

The purpose of Li Xuan's flight to the United States this time is precisely to have a lot to do with the Oriental Satellite Communications Company. Under the strong impetus of George H.W. Bush, the Information Superhighway Act is progressing rapidly and is likely to be approved by Congress in the next year or two.

And the elder Bush is the biggest favorite for the next US president. This has excited the IT industry across the United States. Even Silicon Valley, the Democratic Party's traditional vote base, seems to have recently turned from blue to red. A large amount of money from the tech community began to flow into Bush Sr.'s campaign fundraising account.

If the "Information Superhighway" bill can be successfully approved by the US Congress, and at the same time, the elder Bush, who promoted this bill, can successfully enter the White House, then the development of the US information technology industry is bound to be unstoppable. The prerequisite for realizing the grand plan of the information superhighway is the construction and upgrading of large-scale basic communication facilities.

As early as last year, the Eastern Group began negotiations with MCI Communications, the second largest telecommunications operator in the United States. The telecommunications sector in the United States has long been monopolized by Bell, especially the long-distance telephone bills in the United States, which can be said not to be determined by the market. Rather, it was negotiated between Bell and the Federal Communications Commission (FCC).

Under these circumstances, the U.S. government finally offered the anti-monopoly weapon against Bell. After a lengthy lawsuit, the U.S. government finally won the antitrust lawsuit in 1984 and successfully broke up Bell, which gave MCI and other small companies more room to grow. After several years of rapid expansion, MCI has grown to become the second largest long-distance operator in the United States after Bell.

To compete with Bell, MCI was founded back in 1971 in partnership with Lockheed. A new company called MCI Satellites. Because the use of satellites for long-distance signal transmission can save a lot of cable laying costs. And Bell was as early as 1962. The use of communication satellites for long-distance signal transmission has begun.

However, the construction of a satellite communication network also requires a lot of money. MCI is under the pressure of Bell, a giant in the industry. The pressure to survive is very high. In order to raise the funds needed for its expansion, it eventually transferred its entire stake in MCI Satellite to IBM for $400 million.

But MCI's quest to have its own satellite communications network has never stopped, and Dongfang Satellite Communications is clearly an excellent acquisition target. Similarly for Li Xuan, MCI is also a piece of fat that he covets. Because he knows very well that the users of mobile phones and computers in the future far exceed the current fixed-line users, and this is a very large market in the field of telecommunications.

But the U.S. telecommunications sector is not a completely free and competitive market, and many aspects are restricted by the Federal Communications Commission (FCC). Therefore, if Li Xuan wants to get a piece of the pie in this field, the best way is to control an existing telecom company, rather than starting from scratch.

Li Xuan's ideal partner is naturally Bell, which fell into decline after the peak of glory in the nineties, but was still the largest telecom operator in the United States until Li Xuan left the United States. But the current Bell Company is far from what Li Xuan can eat, and the much smaller MCI company is a better choice in comparison.

MCI also grew to become the second largest telecommunications company in the United States in the 90s, but was later acquired by WorldCom and then declined with WorldCom's fraud. But now MCI is a thriving and fast-growing sunrise company.

It was the first company in the nation to deploy single-mode fiber optic cables, and as early as 1984 it built a Mid-Atlantic fiber optic system connecting New York and Washington. Optical fiber is the mainstream of information transmission in the future, which shows that the vision of MCI's management is still very keen.

Since the two parties are affectionate and want each other, the Eastern Group quickly began negotiations with MCI's management for mergers and acquisitions. The term "information superhighway" is definitely one of the most popular tech words this year. Because of the "Information Superhighway" bill, the communications field is also quickly becoming a new hot spot favored by capital. As a result, MCI's attitude towards negotiations has gradually become tougher against this favorable background.

But the previous stock market crash helped Li Xuan, and MCI's stock price plummeted by more than 33% in two days. In the case of a sharp drop in the stock price of MCI, it must also release some good news to stabilize investor sentiment.

Most listed companies have adopted the plan of buying back shares, but MCI has been doing its best to expand in recent years, taking advantage of the opportunity of the main competitor Bell Company, which has suffered a great loss of strength due to the forced split, so there is simply not enough cash to buy back the company's shares.

In this case, completing an M&A that will benefit the company's future development is undoubtedly an excellent choice. After MCI's stance softened, the two sides quickly reached a final agreement.

Li Xuan exchanged all the assets of Oriental Satellite Communications Company and $350 million in cash for a 25% stake in MCI. In addition, taking advantage of the collapse of MCI's stock price, Li Xuan took the opportunity to inhale MCI's shares in large sums.

Therefore, after the completion of the asset replacement, Li Xuan's actual equity in MCI has reached 27.5%, becoming the largest shareholder. The shareholding of U.S.-listed companies is generally relatively dispersed, and the same is true for MCI. When MCI was first founded, the company's founders sold a large amount of equity to venture capital firms in order to raise enough development funds.

With the continuous allotment of new shares to raise funds after MCI's listing, MCI's equity has been further diversified. Therefore, Li Xuan, who holds 27.5% of the shares, actually has the qualifications to re-elect the board of directors as a controlling shareholder! )