Chapter 463: Big Deal
"Of course, before you make an opinion, you take a look at this plan." Cai Siqiang took out a small USB flash drive, and after Duke opened the files in Cai Siqiang's USB flash drive, he switched the screen to the magic mirror curtain wall.
"$15 billion?!" This plan is obviously a concise document, and on the first page, it is clear that it is a breakdown of the total budget expenditure of the acquisition project, and the first thing that catches Duke's eyes is a set of numbers with an increased font size, 15 billion, which makes Duke, who is used to seeing huge transactions, browble, which is really a big deal.
It seems that Geely spent more than $1 billion to buy Volvo back then, is this Opel much more valuable than Volvo, ten times more expensive?
Duke turned to the next page with questions, this is a page of the introduction of Opel, Opel is actually a century-old store, as early as the thirties is a subsidiary of General Motors, since its establishment has built up to 50 million Opel cars and other vehicles, can be described as a glorious past.
In the past year, 1.1 million cars were sold, sales were close to $20 billion, a loss of $1.25 billion, 40,000 employees, including 25,000 production line workers, the company has as many as 23 production plants and assembly plants in Western and Central Europe, with the production capacity of nearly 2 million cars per year, most of which are concentrated in Germany, and it is precisely because of these huge factories in Europe that have serious excess capacity, so that Opel's fixed costs remain high, which caused Opel's huge losses.
Next, the total budget of the acquisition was analyzed, and this cost included expenses such as Opel's debt restructuring, stock transfer, and payment of Opel's pension, as well as future operating capital preparations, etc., and soon Duke finished reading this short report, allowing Duke to see that it is a super problem company that has been losing money in the hands of GM for many years, and now it can be described as stormy and may fall at any time.
If GM still holds Opel in its hands, there is no doubt that in order to support the company, GM will have to continue to transfuse blood to make up for the huge losses of more than one billion US dollars per year, but this subsidy action has lasted for almost 20 years for GM, and GM has not seen the prospect of profitability.
For GM, the best way for Opel to make a profit now is to restructure, reduce the scale of excess capacity, and lay off redundant workers in large numbers to reduce huge expenses to turn a profit.
But these are difficult for the powerful European Union of Opel to accept, and they are demanding that GM find a way to solve the problem by making Opel more competitive, rather than seeking lower production costs by simply laying off employees and shifting production to emerging countries.
At the same time, Germany's zhèng fǔ also put forward requirements for GM, and a spokesman for Chancellor Stein said that he hoped that GM's restructuring plan for Opel would pay special attention to employment safety and not bring additional burdens to Opel factories and workers, implying that large-scale layoffs and salary cuts are not allowed.
These requirements have significantly limited the leeway for GM to take action, and several of GM's restructuring and divestment activities have been brought to naught.
Of course, this century-old store has survived in the automotive industry until now, and it has many unique features, with world-class standards in terms of technology and manufacturing.
If done right, it is not impossible to achieve a skyrocketing in the automotive industry.
After reading this brief plan, Duke had an intuitive understanding of the cause and effect and the price that Dongfang Qiyang needs to pay in the future.
"What do you think of this after reading this?" After Cai Siqiang saw Duke read it, he asked again, this is a big deal, 15 billion US dollars is only a conservative investment estimate in previous years, although Cai Siqiang himself is more confident, full of confidence in the future of Oubao's smart car prospects, but if the market situation of smart cars does not meet expectations, and Opel's sales in China are not big, then the huge investment not only has to pay tuition, but also it is not easy to get out of the broken arm.
Although with the current strength of Duke and Lao Li's family, it is not impossible to support such a burden for ten or eight years, but everyone is here to seek wealth in business, who would be stupid to carry a burden all the time? If you can't make money all the time, Duke's company and Lao Li's company can bear it, and the body of Qiyang Group is not as hard as the two of them.
Judging from the historical cases of international acquisitions in the past, large-scale mergers and acquisitions are often far more failures than successes, although SAL has been able to achieve great success in the past several acquisitions, it is all thanks to Duke's unique technical support, so that the acquiring company can be reborn in the product, so as to obtain huge product competitiveness, so as to achieve such success.
This time in the automotive industry, in the face of smart cars that are still in the embryonic stage, can this product really save a super-large problem enterprise like Opel with annual sales of nearly 20 billion US dollars?
No matter how confident Cai Siqiang is in Duke, he doesn't dare to pack tickets.
"If you see it, let it go, I support you 100%." Duke didn't think that much about it, and even though the big acquisition plan used more money than any other in the company's history, if you think about it, there were three apportionments to the acquisition, and when it came to SAL, it was worse than the acquisition of the new Nokia Mobile.
What's more, these funds are not a one-time payment, most of them are invested in stages in the continuation of production and operation, and what really needs to be paid immediately is the stock transfer expenses in the early stage and the pension fund of employees. The next huge amount of European workers' wages and benefits and other expenses are paid separately on a monthly basis.
If the restructuring of Opel goes well, and it can restructure its low-end and high-end products and successfully open up new markets, then the rolling cash flow will make these burdens less important.
For this reason, Duke intuitively feels that it supports this large-scale acquisition, after all, it can build an automobile group as quickly as possible, and for Duke, who is accustomed to fast-paced development, it is not afraid of huge potential risks.
"Then we will go down to the essence of xìngcāo, fortunately, the huge amount of money we raised from the Hong Kong stock market is not much suitable for use now, this time it is all smashed into the automotive industry, the main investment is of course Opel, and the other investment direction is that I am ready to acquire an automobile engine design company and an automotive electronics design company to accelerate our progress in automotive research and development."
Although he knew that Duke would most likely agree with him, Cai Siqiang was very happy to get Duke's support, and after a brief report on his next steps to Duke, he ended the internal negotiations involving tens of billions of dollars in investment.
(Thank you book friend "Yin Chinese" for cheering!) )