Traveling through the sword to engage in military industry.

Negotiations resumed.

"Mr. Qi, we basically agree with your latest proposal." Elke, who had obtained the latest authorization, was in high spirits. During the negotiation, he did not have the spirit of haggling over every penny as he had last time.

“We believe that we can agree with your offer in terms of valuation. In terms of equity, we suggest that you own 49% and we own 51%. This will make it easier for us to pass the approval procedures for a series of domestic joint ventures. This is not much different from your goal. I think you should have no objection to such a result.

Of course, we hope to include the voting rights grant you mentioned earlier in the cooperation agreement.”

Upon hearing that there was hope of obtaining voting authorization from Dongda, and faced with the impending surge in the power of the board of directors, Robert and his colleagues acted very quickly. They quickly reached a consensus within the board of directors and had clear opinions on the concession of equity.

In fact, they are very clear that Dongda is unlikely to make too many concessions on valuation issues. After all, the other party is not doing charity. The intrinsic value of the automotive business has a clear benchmark. Strong competitors such as GM and Ford are all listed companies, so it is not too convenient to compare.

Based on a comprehensive assessment of a series of indicators including Rolls-Royce's sales, profits, current value of assets, brand story, etc., the value given already includes a huge premium for the brand.

The current cooperation model is that the other party sends money to the door like a timely help. People can choose not to invest, but the current shortage of funds at Rolls-Royce requires them to obtain an additional large amount of funds to overcome the difficulties.

In other words, the initiative in this negotiation was originally in the hands of the other party.

Rolls-Royce has already raised enough funds in the domestic market, but there is not a single investor who has given up their voting rights.

"In principle, we can agree to this share arrangement." Qi Tongsheng was relieved after hearing this. "Our voting rights can be written into the agreement, but we need to ensure the corresponding interests. For example, if the company suffers losses during operation, the salaries of the management layer must not increase. We need to ensure that the entire automotive business is developing healthily, so that the salaries of the management layer can be reflected accordingly. In the future, the salaries of the management layer of the automotive business must be linked to the operating results. A considerable part of the salary comes from the dividends of the company's new profits, ensuring that the interests of the management layer are consistent with the interests of shareholders.

If the automotive business continues to be unprofitable for two consecutive years, the licensing agreement will be cancelled.”

The condition Qi Tongsheng added is very important. Otherwise, such a large investment would be wasted. If the company encounters unscrupulous merchants who drain it, it is entirely possible that the company will lose all its money.

Therefore, restrictions on operating performance are necessary. Why keep management if there is no performance growth?
Elk thought about it for a while and felt that the other party's proposal was reasonable. Indeed, the other party gave a two-year buffer period, and a serious management would not allow the automobile business to suffer long-term losses.

So after thinking for a while, Elk slowly nodded and agreed to this additional condition.

Rolls-Royce was originally a little surprised that Dongda granted voting rights to the board of directors. Now with this condition added, it has confirmed that the other party is not a fool. Now it understands that the other party is simply here to share the big pie of automotive business development.

After all, Rolls-Royce's automotive business has been developing well. As a world-class brand, it is now profitable every year. This is why Rolls-Royce, which is obviously an aviation high-tech enterprise, still retains the automotive business, which seems to be a relatively ordinary conventional industry.

This is a goose that lays golden eggs, and if it can be kept, Rolls-Royce hopes to keep it.

The high-end cars they build have a completely different production model from Ford, GM, and VW, and their customer base is basically completely unrelated.

In the world of Bright Sword, people who can buy Rolls-Royce cars need to undergo qualification review. Basically, they are either rich or noble. Not too many cars are sold each year, and the amount of a few thousand to more than ten thousand can maintain a good profit.

So in this business, Rolls-Royce does not have too much sales pressure, and their sales are basically driven by the reservation model.

This is basically consistent with the production model of passenger aircraft.

In addition to the large-scale hand-crafted customized production process, their management model is almost the same as that of passenger aircraft production.

So in terms of corporate culture, there is no gap between Rolls-Royce's automotive business and its aviation business.

The negotiations with Dongda went smoothly, which made the Rolls-Royce board of directors very satisfied.

But the integration of the domestic aviation industry is not so easy.

Although the aviation industry is being reintegrated through equity exchange, the shareholder committees of several companies have their own insistence on valuation.

Due to the complexity of the business and the fact that these companies are not publicly traded, there are obviously many different aspects to the perception of valuation.

Based on the valuation made by a third-party accounting firm, Rolls-Royce hopes to lower the prices of the other three companies on the grounds that it is Rolls-Royce that has signed the agreement with Dongda, and the value of Rolls-Royce is not only reflected in its current value, but also includes the realization of part of the future value of the agreement.

Simply put, Rolls-Royce obviously needs to make a certain degree of discount on the value of 1500 A300 aircraft.

But those three companies obviously would not agree with such empty promises.

They hope to make valuations based on tangible indicators such as each company's current net assets, operating cash flow and annual profits.

Discounting future expectations does not comply with accounting standards.

Of course, Robert, Elke and others expressed strong opposition.

They believe that this would greatly underestimate the value of Rolls-Royce. According to these cooperation agreements and potential market value, Rolls-Royce deserves at least 2 to 3 times the premium valuation.

The huge cognitive differences brought the negotiations to a standstill. However, with the 2 million pounds injected by Dongda, Rolls-Royce is now fearless. They have demonstrated rare high efficiency and have made micro-innovative changes to the new model based on the CAC-120 with Dongda Yandu Aviation Industry Company.

So they are not in a hurry to negotiate.

It was April now.

One year after its test flight, the CAC-120 received its airworthiness certificate from Dongda and began the first batch of mass production for a domestic order of 120 aircraft.

At the same time, the first A300 model also successfully completed its test flight in Westminster, and they began intensive work on airworthiness certification.

This progress and the order situation of Dongda University stimulated the shareholders of several domestic aviation companies in the UK who were originally waiting for the price to be raised.

As a world-renowned aviation power, Britain's aviation industry flourished during World War II, with the birth of more than a dozen aviation companies that could produce various fighter jets, each with its own unique features.

In the post-war 1s in the main world, the British aviation industry also made unremitting efforts in the direction of civil airliners. The most promising of these were the Trident and the BAC11-1962. The former was a medium- and short-range three-engine jet airliner developed by De Havilland. It first flew in January 1 and was put into operation in 1964. The Trident was famous for its three engines and unique flight control system. It was mainly sold to European airlines and was discontinued in 1975. A total of 117 were produced. The BAC1-11 was a 1960-seat short-range jet airliner developed by the British Aerospace Corporation in the 1963s. It first flew on August 8, 20 and was put into service in 1965. The BAC1-11 was characterized by its two engines and T-tail design. A total of 244 were produced, and its main customers included British airlines such as British Airways and Laker Airways.

Objectively speaking, the performance of these two models are remarkable. The early models are not inferior to the three major aviation giants in North America. However, in terms of further development of subsequent models, these British airlines are weak and have a narrow market. After they have occupied their own domestic markets after selling them out, they have almost no follow-up orders.

This resulted in a lack of subsequent R&D funding and cost amortization, causing both aircraft to eventually disappear in the market.

Of course, this is also because after the British Empire's national strength declined, they no longer had the power to maintain the development of the domestic aviation industry and use their country's influence to sell passenger aircraft to more countries.

In this regard, the development of the aviation industry is actually closely related to the development of a country's strength. Weak countries simply do not have the basic conditions to develop their own aviation industry, especially the civil aviation industry.

You have to know that this is not something that can be done just by manufacturing it. Daxiong also manufactured many models in the field of civil aviation. Among them, the most influential one was the Ilhetu series, but it was eventually eliminated by the market due to lack of competitiveness.

Originally, the Big Bear IL-62 had the potential to compete with the Boeing 707. The maximum passenger capacity of the IL-62 is 186 people.

另外一款著名的大熊客机是图-154，这是大熊研制的三发动机中程客机。当年在北大西洋公约组织的代号称为“大意”(Careless)。同类竞争者型号是流氓鹰的波音727、日不落的三叉戟客机。截止2006年停产时，图-154各型已生产935架，其中包括大约325架图-154M。这几乎算是大熊在民用客机中的巅峰机型了，可惜图-154的安全纪录比较差。但意外的原因通常是由于长时间于恶劣和极端的天气、频繁的航班、低素质的维修和人为失误。

Due to the extensive maintenance system and even more extensive operation of the Big Bear, the Tu-154 had an alarming accident rate, with a total of 62 crashes. In addition, there was a lack of subsequent improvements, and this series soon disappeared in the tide of the times.

Compared to its competitor, the Boeing 727, production of this airliner ended in September 1984, with a total of 9 produced and 1 crashes, which is twice as high as the Figure series.

These examples of struggle fully illustrate the high threshold of civil aviation. Even among the aviation giants within the Rogue Eagle, only Boeing was left in the end. The remaining giants were either acquired by Boeing or the like. For example, McDonnell and Douglas could not win together and eventually joined Boeing under the name of McDonnell Douglas. Lockheed Martin's civil aviation was suppressed by Douglas and Boeing in the early days.

The European continent of the main world united to form an Airbus monster to hold up the banner of the second airliner. Otherwise, the main world will have to accept the monopoly of one airliner company.

These aviation industry leaders of the United States have naturally studied the situation in the passenger aircraft market and are well aware of the difficulty of developing the passenger aircraft market. It is not just about building a capable fighter jet and then selling it to the authorities. The most difficult part of a passenger aircraft is not just about building it.

Instead, it is necessary to ensure that the airlines can operate safely and earn money, which is not easy. From design to operation and maintenance, the entire system must be newly built. The cost of building such a system is simply not affordable for airlines of their size.

In the main world and time, their response strategy was to spontaneously unite and begin merging into a larger company to do this. In the world of Bright Sword, Rolls-Royce is now obviously lucky enough to have caught a ride.

They have all figured out the ins and outs of this aircraft, and have even visited the prototype that came out of the Rolls-Royce production line. To be honest, the completion of this aircraft does not seem like a new aircraft with a completely new design, but rather a mature model that has been optimized after years of operation.

The test flight was completed smoothly with basically no problems.

During the first test flight, it flew more than a thousand kilometers back and forth, because the prototype of this passenger plane had already flown tens of thousands of kilometers in test flights at Dongda University and had already undergone test flights in various climatic conditions. The WS-9 turbofan engine produced by Dongda University used also performed stably.

Currently, WS-9 engines are all produced directly from Dongda Aero Engine Company. According to the requirements of the agreement, after a certain number of years of cooperation, especially after the successful test flight of the new generation of jointly researched aero engines, Dongda may consider authorizing Rolls-Royce to produce this turbofan engine.

Ultimately, the goal of domestic production of all A300 components will be achieved.

Rolls-Royce did not have many objections to these conditions. After all, this passenger aircraft was originally independently developed by Dongda, and all the components were independently designed by Dongda. Before recovering the R&D costs, Rolls-Royce could understand it because they themselves had a deep understanding of it.

If the maturity of the aircraft model is an important factor that impresses these companies, then the indicator that the operating cost per 15 kilometers is % lower than that of competitors has directly become the last straw that breaks the camel's back!
Because it is a turbofan engine, the fuel consumption of the A300 is more than 10% lower under the same passenger carrying conditions compared to the current mainstream competitors which are all turbojet engines. In addition, the cost of the passenger aircraft itself can be greatly reduced due to the participation of Dongda in research and development. Therefore, a reasonable profit can be made if the purchase price is 10% to 15% lower than that of competitors.

This means that it is obvious to the naked eye that this passenger aircraft will have a chance of becoming a big seller.

Originally everyone thought that the sales volume of 1500 was just a pipe dream, but now it seems that there is a great possibility that the sales volume of this aircraft will exceed 1500 in the future. This is an unimaginable big cake for the British aviation industry. If they miss this train, they will no longer have any chance. The British aviation industry cannot accommodate the development of two aircraft.

Rolls-Royce finally achieved its goal of merging several target companies, and after integration, it became its own civil aircraft business unit and made final preparations for mass production.

Everything is going smoothly as expected. (End of this chapter)