In Hong Kong, we build a global business empire

The weather in London in early April was not good; the temperature was not high and there was frequent rain.

Lin Haoran sat in a reception room of the tenement building, drinking tea and chatting with Uncle Tang and several members of the British Chinese Chamber of Commerce.

This is his 8th day in the UK.

A lot has happened in these days.

For example, on the fourth day after arriving in the UK, Lin Haoran visited his alma mater in this life, the London Business School.

The school invited him, which was a good opportunity to boost Lin Haoran's popularity among the British public, so he naturally wouldn't miss it.

Therefore, he not only went, but also gave a public speech at the school.

At the same time, he also donated £10 million directly to the University of London to establish the "Lin Haoran Foundation," which will allocate a portion of the funds each year to reward outstanding students!

This donation has generated considerable buzz in the British media.

The Times published a front-page report the following day, titled "Mr. Lin Haoran donates millions of pounds to University of London to establish the Lin Haoran Foundation," which detailed Lin Haoran's business achievements and the significance of the donation.

The Financial Times also mentioned this in a commentary, believing that through this donation, Lin Haoran not only demonstrated his sense of social responsibility, but also further consolidated his positive image in both British political and business circles.

These reports, however, have reduced the public sensitivity that his involvement in the Austin and Land Rover acquisitions might have triggered.

Although it was Bao Yugang who came forward, he was, after all, the major shareholder.

Therefore, for Lin Haoran, this donation was not only about enhancing his reputation, but also about providing a protective shield for the entire acquisition.

British media have always been highly vigilant about foreign capital acquiring core assets of the country, and any misstep could lead to accusations of "selling out national interests."

But with this multi-million pound donation as a prelude, the focus of public opinion will shift from "foreign capital buying up British brands" to "a socially responsible international investor supporting British education."

The former is controversial, while the latter is a celebrated story; the difference between the two is enough to determine the public opinion surrounding this deal.

Furthermore, since Hong Kong is still a British colony, Lin Haoran, although not a British citizen, can be considered half one of them.

With such a background, coupled with a donation of tens of millions of pounds and the presence of Sir John Paul Wong at the forefront, the public opinion surrounding the acquisition has completely shifted to a positive direction.

For example, he eventually reached an agreement with Vickers Group to acquire a 20% stake in Rolls-Royce Group for £15 million, becoming the second largest shareholder of Rolls-Royce and obtaining the exclusive dealership rights for Rolls-Royce in Greater China and Southeast Asia.

Don't think it's incredible that 3 million pounds is enough to acquire a 20% stake in Rolls-Royce. In fact, when Vickers acquired Rolls-Royce three years ago, it only cost 3800 million pounds.

The only difference is that three years ago, Rolls-Royce was operating at a loss, while now, after being acquired by Vickers Group, it has been profitable for two consecutive years.

Therefore, a premium is quite normal.

For Lin Haoran, investing in Rolls-Royce was merely an unexpected gain from his early strategic planning.

His real highlight was the acquisition of Austin and Land Rover, which were the core pillars of his automotive empire—businesses capable of large-scale production, targeting the mass market, and generating continuous cash flow.

After a week of negotiations, the acquiring party, represented by Bao Yugang, the British government, and the Leyland Group have reached a preliminary cooperation agreement. Bao Yugang's side has officially acquired Austin Company and Land Rover Group from the Leyland Group.

Originally, the Austin Rover Group included all passenger car brands such as Austin, Rover, MG, Morris, and C5, and was the largest subsidiary of the Leyland Group.

After negotiations, the Austin brand was officially separated from the Austin Rover Group and became an independent business unit.

Because MG shares a production line with Austin and is heavily reliant on Austin, the MG brand was also spun off along with Austin and incorporated into Lin Haoran's acquisition scope as a sports sub-brand under Austin.

As for MINI, since it is not yet an independent brand and is just a model in Austin, it is naturally included.

In other words, buying the Austin brand is equivalent to acquiring the intellectual property rights of the Austin, MG, and MINI brands, as well as all the production facilities, supply chain system, sales network, and all employees of the Longbridge factory.

Ultimately, the full acquisition price for the Austin + MG dual brands was £2100 million, and the full acquisition price for Land Rover was £4200 million, for a total price of £6300 million.

Moreover, the acquiring party will not assume any historical debts in this acquisition.

In other words, Lin Haoran and Bao Yugang acquired a clean asset package with no historical debt burden.

All of Leyland Group's financial burdens, including bank loans, pension gaps, and historical losses, will be borne by Leyland Group itself and will not be the responsibility of the new company.

This is not a case of the British government being kind-hearted on a whim, but rather a common rule used by the Thatcher government to promote the privatization of state-owned enterprises. The government would cover historical debts and pension gaps, and the buyers would only take over clean business assets.

Otherwise, the massive debt and pension gaps hidden behind the financial statements would be enough to deter any potential buyer.

Who would be willing to spend hundreds of millions of pounds to buy a mess with more net debt than assets?

Although Margaret Thatcher was tough on privatization reforms, she was not stupid.

She was well aware that for privatization to proceed smoothly, buyers had to see a clean, transparent, and predictable transaction structure.

Therefore, in the privatization plan for Austin and Land Rover, the British government clearly adopted a clean asset divestiture model, with the government assuming all historical debts and pension gaps, and the buyer only acquiring operating assets and brand intellectual property.

In this way, the buyer's risk is minimized, and the transaction becomes feasible.

Regarding the investment, of the final £6300 million, Bao Yugang invested £300 million and was responsible for negotiating and coordinating subsequent political and business relations, thus acquiring a 10% stake.

As for Lin Haoran, he invested £6000 million, accounting for 90%!

Originally, Lin Haoran wanted to give Bao Yugang more shares, since without Bao Yugang's involvement, this deal would not have been possible, at least not in the next few years.

The British value identity and trust far more than they are sensitive to price itself.

A British knight and a Hong Kong businessman sat at the negotiating table, and their attitudes were completely different.

The name Bao Yugang is a stepping stone in itself. Without this stepping stone, Lin Haoran wouldn't even be able to get to the negotiating table, even though he's not short of money.

But Bao Yugang insisted on only taking 10% of the shares.

He told Lin Haoran, "Haoran, I'm contributing my connections and reputation, while you're contributing real money—6000 million pounds, no small sum. I'll only contribute 300 million pounds. This 10% stake is already enough for me to make a profit. Taking more would make me feel guilty. Besides, I'm getting old and my energy is limited. I can't devote myself to the management of these brands as wholeheartedly as you do. My biggest contribution is to take a minority shareholder position and help you smooth out the political and business relationships."

Lin Haoran declined several times, but Bao Yugang was adamant, so he didn't press the matter further.

He knew perfectly well that Bao Yugang had never intended to acquire a car company. It was only after hearing Lin Haoran's plans and ideas for the automotive industry on his way to the UK that he decided to get involved.

This is considered a huge favor that Bao Yugang is giving Lin Haoran.

"Haoran, I'm making this investment with you not because I'm optimistic about the automotive industry, but because I admire you as a person. You're methodical, far-sighted, and willing to invest."

"I believe you can make this happen, which is why I'm willing to invest with you. It can help the mainland and make money at the same time, so why not?" Bao Yugang said this to Lin Haoran with a smile.

After listening, Lin Haoran couldn't help but feel a little emotional.

He knew that Bao Yugang's words were sincere.

In Hong Kong's business circles, it is extremely rare to gain the trust of a senior figure like Bao Yugang.

This is not only a recognition of his personal abilities, but also an affirmation of his long-term vision.

After these two deals were finalized, Lin Haoran spent a total of £7500 million, equivalent to approximately HK$8.2 million, to acquire a 20% stake in Rolls-Royce and 90% stakes in the four major brands: Austin, MG, Land Rover, and MINI.

To be honest, this price is much lower than Lin Haoran expected.

Because he knew that in a few years, it would cost at least four or five hundred million pounds to acquire these shares.

It's fair to say he really got a great deal.

In addition, good news came from Su Zhixue's side this morning: Huanyu Investment Company has finally secretly reached a 20% stake in Dazhong.

This shareholding is only 0.1% less than that of the largest shareholder, the Lower Saxony government of Germany.

Although the Lower Saxony state government holds 20.1%, that is a political shareholding at the state level. They will not easily increase or decrease their holdings; it is merely a "stabilizing force."

The 20% stake held by Huanyu Investment Company is purely commercial, offering a completely different level of operational flexibility.

Everything is moving in a positive direction.

Two days ago, Bao Yugang had already returned to Hong Kong ahead of schedule.

After all, he is different from Lin Haoran. Whether it is the Global Shipping Group, Wharf Holdings, or Wheelock & Co., he needs to handle many things personally.

Lin Haoran owns far more businesses than Bao Yugang, yet he habitually acts as a hands-off manager, delegating all power to professional managers.

Therefore, Bao Yugang naturally could not stay in London for too long.

After finalizing the acquisition of Austin and Land Rover, he set off to return to Hong Kong.

Lin Haoran had a plan to travel to Germany during his trip to the UK, so he did not return to Hong Kong with Bao Yugang.

Tang Lou, Tang Kun's private reception room.

Lin Haoran and Tang Kun chatted and drank tea, enjoying themselves immensely.

Lin Haoran has always been grateful to Tang Kun, an elder who had given him a lot of help before he became a business tycoon.

Although he is now a world-renowned top billionaire, he still maintains the humility and respect due to a junior in front of Tang Kun.

"Uncle Tang, I'm going to Germany the day after tomorrow." Lin Haoran put down his teacup and said sincerely, "This trip to England was very short, and I didn't have time to chat with you for a few days. I'll come to visit you again when I have more time."

Tang Kun waved his hand: "Business is important. Your Uncle Tang is still in good health. We'll have plenty of time to chat later. I've heard about what you and Sir John Paul did in England this time: donating ten million pounds, acquiring Land Rover and Austin, and investing in Rolls-Royce. These are all big moves."

"You're so young, yet you've already accomplished so much. Your father would be very pleased if he knew."

Lin Haoran smiled and said, "Uncle Tang, you flatter me. I just think that when the time is right, we should do what needs to be done. Although the British automotive industry as a whole is declining, these brands still have their foundation. As long as someone is willing to invest and reform, they have a real chance to stand up again."

Tang Kun nodded: "You're right. These old British brands have a good foundation, but they were dragged down by the egalitarian system and labor unions."

Once you take over, as long as you can improve management and efficiency, the value of these brands will be rediscovered.

A member of the chamber of commerce nearby interjected, "Mr. Lin, after you acquired Land Rover and Austin, what are your plans for the UK factories? Will you transfer production capacity to Asia?"

Lin Haoran thought for a moment and answered cautiously: "I will keep the factory in the UK, but I will renovate and upgrade it. In the future, some of the production capacity may be transferred to Asia to reduce production costs and explore emerging markets."

However, the high-end manufacturing and R&D centers in the UK will remain, and the core technologies and management systems of these brands will still be primarily based in the UK.

In acquiring Austin and Land Rover, they have agreed to the British government that the research and development centers for Austin and Land Rover must remain in the UK, and that core technologies and intellectual property cannot be transferred outside the UK.

This is a bottom line that cannot be crossed in the short term.

Although Lin Haoran was well aware that he would eventually have to gradually transplant these technologies and management systems to the mainland, at this stage he had to strictly keep his promises and let the British government and unions see his sincerity and credibility.

Only after trust is established can more flexible adjustments be made within the scope of the rules in the future.

In any case, for him, whether it's Austin, Land Rover, or MG, they all need some reform.

This reform will take at least several years.

Therefore, it will be difficult for the mainland to rely on these brands in the short term.

This is also one of the important reasons why he is targeting Volkswagen.

Brands like Land Rover, Austin, MG, and MINI, while possessing strong brand value and technological foundation, are still in a phase of reform and restructuring in the short term and cannot quickly provide large-scale production capacity and technological support to the mainland's automotive industry.

Volkswagen, however, is different. It is a mature, well-established, and well-capacity global automotive giant. If mainland China's automotive industry can leverage Volkswagen's platform and technology, it can achieve leapfrog development in a shorter period of time. (End of Chapter)