Return to 1958 and build a century-old giant

Chapter 878 The Beginning of German Investment

Large IPOs typically involve more than one underwriter, which inherently involves an exchange of interests. Therefore, acquiring Mercedes-Benz stock is worthwhile.
“8%, that’s too much. We at Deutsche Bank have always been bullish on Mercedes-Benz,” Helmut said, shaking his head.

Yang Wendong smiled and said, "That's easy. As long as we can agree on the terms first, we can discuss the specific number of shares later. It's all about interests."

Helmut nodded and said, "Alright, we'll discuss it further later."

Yang Wendong then asked, "Helmut, this transaction of ours also needs to go through Mercedes, right? We can't keep this from them, can we?"

Helmut said, "Of course, I will inform Mercedes before the deal is finalized. They just need to know. The board of directors has no right to prevent us from handling our shares individually."
However, since you will need to cooperate with Mercedes-Benz in the future, and I also need to maintain a good relationship with Mercedes-Benz, a friendly resolution is the best outcome.

“Okay, that’s fine.” Yang Wendong then added, “Besides this transaction, I need to continue acquiring Mercedes-Benz shares. If your bank is no longer willing to sell, then please take on this business for me long-term and help me contact other Mercedes-Benz shareholders. I am willing to continue increasing my Mercedes-Benz shares.”

German brands will remain virtually unshaken for decades to come. Even with the advent of electric vehicles, it will be difficult to challenge the dominance of high-end brands like BMW, Mercedes-Benz, and Audi in the early stages.

Of course, Mercedes-Benz's acquisition of Chrysler in the late 90s was a bad move, but we'll talk about that later.

Therefore, from an investment perspective, he would naturally be very happy to continue increasing his equity in BBA, and these stocks would also be very high-quality financial assets that can be easily pledged as collateral.

Helmut frowned and said, "Eric, your actions might make the Flick family uneasy."

“I am a foreign investor without German citizenship. Even if I acquire enough shares in Mercedes-Benz, it will not threaten the German family,” Yang Wendong said.

Helmut shook his head and said, "You yourself may not pose a threat to the Flick family, but with more shares in your hands, you will also have voting rights. In theory, you can support other German shareholders, which is also a huge threat."

Yang Wendong said, "That's true, but no matter what, I will continue to make acquisitions. Please inform the Flick family that I have no intention of participating in the management or board of directors of Mercedes-Benz."

“Such verbal promises will not put the Flick family at ease,” Helmut said with a smile.

Yang Wendong replied, "It's impossible for me to make a written commitment, is it? That's out of the question. If he doesn't agree, he can just compete with me for the shares that other shareholders are willing to sell."

As one of the world's top billionaires, he needs to be assertive when necessary. Although he has no intention of participating in management, he still wants to exert influence in other areas by investing in Mercedes-Benz.

Helmut glanced at Yang Wendong and said, "Alright, let's not tell the Flick family about this for now, just tell them about our deal."

Other Mercedes shareholders may not be so quick to sell their shares. Let's consider this matter again when your shareholding is truly sufficient to influence the board of directors.

“Okay, we don’t need to think too much about the future,” Yang Wendong agreed.

Let's talk about the future later. Without Mercedes being listed on the stock exchange, acquiring enough shares is not an easy task.

This is a long-term plan, not something to rush. Mercedes-Benz is doing well and has plenty of money, unlike Chrysler, which is in such a hurry that it's almost ready to sell its buildings.

Helmut then asked, "So, do you still want to acquire shares in companies like BMW and Volkswagen?"

Yang Wendong said, "If there's an opportunity, that's fine too. You can spread the word, and if anyone is willing to sell, you can buy it for me."

“Okay, I’ll also spread the word about other parts companies for you, but these companies are even more closed off than car companies. They’re basically controlled by families, so it’s even more difficult. Don’t have too high of a chance,” Helmut added.

Yang Wendong nodded: "I know, just do your best."

Germany's top automotive parts companies, such as Bosch, ZF, Continental, and Siemens, are all privately held companies, some of which are almost 100% controlled by their families, leaving outsiders with absolutely no chance.

However, Yang Wendong didn't care too much. It would be better if these companies could invest, but if they couldn't, there was nothing he could do and he didn't need to force it.

Helmut said, "Okay, Eric, actually, Germany's core industries are not limited to the automotive industry. They have also achieved great success in other industries. If you are interested, you can consider it."

"Aren't most other industrial groups in Germany also family-run businesses?" Yang Wendong asked with a smile.
The UK and the US are very strong in finance, so most of their companies are listed on the stock exchange.

However, inland Europe, apart from Northern Europe, is very conservative in terms of finance. Germany, France, and Italy are all similar. It was not until after the 21st century that Germany and France began to improve.

Italy, on the other hand, has gone down a dead-end path, with many companies refusing to go public.

Helmut said, "Yes, that's true, but if you broaden the scope, you'll always find a suitable target, right?"

“I invested in the automotive industry because it benefits my business, not because I invested randomly.” Yang Wendong thought for a moment and said, “As for other industries, if you can help me acquire a home appliance company or home appliance component company with technological expertise, I can also consider it.”

"Is it an acquisition?" Helmut asked again to confirm.
Yang Wendong nodded and said, "Yes, it's an acquisition. We need to acquire companies with high technological content, the best of the world, such as compressors, motors, or condensers used in home appliances. My businesses in Hong Kong also need such technology and component suppliers."

Honor Electronics started its business with home appliances. Although it has achieved some success in Asia, it is still far behind the global level.

Unfortunately, the technological gap is far behind those decades-old established companies, and Hong Kong's talent pool is also far from sufficient. Therefore, even if Honor Electronics can achieve success in the gaming field and then use the funds to support the home appliance industry, it will not be able to reach the top level.
You must have the skills;
Yang Wendong was already aware of this, but previously his financial resources were limited, preventing him from acquiring top-tier technology in Europe and America. Now, he naturally had the funds, and Germany's industrial strength was still very strong, no less than Japan's. Helmut agreed, "Okay, I'll investigate and see if there are any suitable options."

"Okay, thank you. If it's successful, your commission will be just as good," Yang Wendong said with a smile.

The reason these investment banks are so eager to curry favor with top companies is actually to facilitate acquisitions and investments, from which they can earn substantial commission fees.
This is a win-win situation, since only these investment banks have enough networks and connections to find targets and facilitate the final acquisition.

Helmut smiled and said, "Thank you. I hope we can work together successfully."

"It's a pleasure to cooperate with you," Yang Wendong said with a smile as he shook hands with Yang.

Germany's greatest strength lies in various industrial technologies, not just automobiles and home appliances. They excel in many other industries as well, such as industrial machine tools, non-standard equipment manufacturing, transportation and rail equipment, chemicals, steel, biopharmaceuticals, and so on.
However, these industries have little to do with Yang Wendong's business, so he will not invest in them indiscriminately. Moreover, he is not very familiar with these non-civilian industries, or rather, the future potential of some of the giants he is familiar with is still limited.
For example, BASF is already a top chemical giant. Even if it invests in BASF, the future return rate will not be high. It would be better to use that energy to invest in the automotive or home appliance industries, as these are more conducive to its industrial layout.

However, Germany is not without its merits in the future electronics industry. Some software companies have emerged there, the most famous of which is the former SAP.

However, it was not appropriate for Yang Wendong to make a special visit to such a small business, so he consulted with Klaus, the person in charge of Changxing Group in Germany.

Klaus is a native German who studied and worked in the United States before joining Changxing Group. He performed very well and was subsequently sent to Germany to head the financial business there.
Within the Changxing Group, local talent has also begun to be used on a large scale in many countries. This is a basic practice for many multinational companies. On the one hand, people at headquarters are prone to cultural and economic difficulties. On the other hand, the Hong Kong headquarters itself lacks talent, so it is natural to make full use of local talent in each country.

Klaus said, "Mr. Yang, here is the information you requested, which includes several chain supermarkets in Germany, as well as some software and computer companies in Germany."

"Okay, good." Yang Wendong took the documents, looked at them for a while, and said, "We have a 4.2% stake in Metro supermarket. We need to find a way to negotiate with them again and see if we can invest some more."

If there is no specific target, such as wanting to acquire a technology company, but there are many such companies globally, then it is natural to hand it over to investment banks.

However, if there is a specific target, unless it involves significant political connections, then Changxing Financial Group is generally responsible for contacting the other party internally.

That's how Metro operated; in its early years, he arranged for people to invest in Metro when it was still a small company.

Klaus replied, “Mr. Yang, you have mentioned this before. I have also spoken with the founders of Metro. They are unwilling to continue selling shares and instead adopt a more conservative strategy, preferring to develop slowly in order to maintain the family’s absolute control over the company.”

“Getting my funds can help them grow quickly, and I don’t need much,” Yang Wendong added. “In addition, I can tell them that if they are willing to give me another 5% of their shares, I can arrange for a bank to lend them a low-interest loan. That should be quite tempting.”

In 80, 81, and 82, Europe and the United States began to raise interest rates frantically in order to suppress inflation, which led to a sharp increase in the operating costs of enterprises.

It's fair to say that low-interest loans are extremely attractive to many businesses.

As for Yang Wendong, he could also take this opportunity to arrange for Hang Seng Bank to test the waters in Europe, since he knew that Metro's future would not be unprofitable.

After listening, Klaus said, "I can try again, but I can't say whether I will succeed. As you know, Germans are very stubborn in this regard. Even if I were the founder of Metro, I would do the same."

"Alright then, if it really doesn't work, then forget it." Yang Wendong shook his head helplessly;

The reason he chose the UK first when investing in Europe, besides the relationship between Hong Kong and the UK, is because the UK's financial system is very open, and many companies are eager to go public and raise money. The culture in Hong Kong is actually derived from the UK.
In this situation, Yang Wendong's investment is very convenient. If he sees a promising target, such as Standard Chartered or Rio Tinto, he can simply acquire the shares directly in the early stages. Even without contacting the shareholders and directors, he can easily obtain at least 5% of the equity.

But inland Europe is a complete financial wasteland. Top companies are all family-controlled or not publicly listed, making it difficult for Yang Wendong to make a move.

Unfortunately, Britain is too weak in the industrial and retail sectors, and most of the targets it favors are inland in Europe.

In his early years, he acquired shares in companies such as Metro and Auchan at a huge cost, but even then, the other party was usually only willing to sell a few percent of the shares.

Klaus replied, "Yes, Mr. Yang."

Yang Wendong added, "In addition, you need to work with the trading company in Hong Kong to maintain a good relationship with Metro and ensure a stable supply of goods."

In fact, investing in supermarkets is for both economic benefits and supply. Hong Kong trading companies rely on many supermarkets in Europe and the United States, and hold huge light industrial orders worth about one billion US dollars a year. They also have a huge influence in Hong Kong, Taiwan and the mainland, and make tens of millions of US dollars in profit every year.

“No problem,” Klaus replied.

Yang Wendong flipped through another list and said, "I've also done some research on these companies. Their performance is pretty good, so I won't go. You should visit them individually and try to make a successful investment in them in their early stages."
These companies all make software, and their target customers are in the global market, so relatively speaking, they shouldn't be so stubborn.

This list includes SAP, a future software giant.

As for the other companies, they invested as a sideline to avoid their investments being too precise and attracting the attention of Wall Street.

While they can't possibly know the future, if they were accurate every time, it would only lead to them following suit and investing, which would be detrimental to themselves.

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(End of this chapter)