In Hong Kong, we build a global business empire

Li Bingze took a deep breath and adjusted his mindset.

Having grown accustomed to being high and mighty, suddenly having to bow one's head is indeed very difficult to adjust to.

"Mr. Lin, I have come here today to express my deepest and most sincere apologies to you for Samsung Group's extremely wrong and reckless behavior in the past!"

Li Bingze stood up and bowed deeply to Lin Haoran again, this time bowing even lower and for a longer time.

"We were short-sighted, arrogant, and misjudged the situation. We attempted to interfere in the business of your companies in South Korea using highly inappropriate methods. This seriously violated business ethics and international practices, and was also a great disrespect to you!"

As the head of Samsung, I, Lee Byung-taek, take full responsibility for this!

He straightened up, his face flushed with excitement and shame, but his eyes were fixed on Lin Haoran, trying to express his sincerity.

“We have paid a heavy price and have fully realized our mistakes. We completely understand that you have returned those three small gifts. They are simply not enough to make up for the harm and offense we have caused.”

“I am not here today to beg for your immediate forgiveness, nor to defend Samsung. I simply want to show you our remorse and our sincerity in making amends.”

Li Bingze's voice trembled slightly, almost imperceptibly.

"Regarding 711-Eleven and Lawson's operations in South Korea, Samsung will immediately cease all improper interference and is willing to provide all necessary assistance to ensure their smooth and fair development in South Korea."

All previous unpleasant contacts and so-called conditions are null and void! Furthermore, to express our utmost sincerity, Samsung is willing to…”

Lin Haoran raised his hand, interrupting him, his tone calm and unwavering: "President Li, one apology is enough. I can tell you're sincere this time."

However, in the business world, sincerity and apology alone are not enough. If you do something wrong, you must bear the consequences and pay the price.

This cost cannot be offset by a few kind words or by opening up a few channels.

Li Bingze's heart sank, knowing that the real negotiations had begun.

As expected, the other party would not easily let go of this opportunity to establish their authority and reap the rewards.

But now he has no other choice.

After investigating those materials, he already knew that the young man in front of him was no pushover.

The methods he used to build such a massive empire in just three or four years were beyond his comprehension.

He was prepared for a major hemorrhage, otherwise he wouldn't have come in person.

"Mr. Lin, please be clear. As long as it is within Samsung's capabilities and does not jeopardize Samsung's fundamental survival, we are willing to seriously consider it." Lee Byung-taek adopted an extremely humble posture, almost placing himself on the chopping block.

Lin Haoran crossed his legs and tapped his fingers lightly on the smooth mahogany coffee table, making a rhythmic sound.

Each sound seemed to strike Li Bingze's heart.

At this moment, it was as if he were not facing a famous South Korean chaebol tycoon, but rather reprimanding his own employees.

“Alright, Chairman Li is so straightforward, then I won’t beat around the bush either. I have a few conditions, and if Chairman Li agrees, then all the unpleasantness between us before will be wiped clean!” Lin Haoran said with a smile.

"Mr. Lin, please speak," Li Bingze said in a deep voice.

"First, regarding Samsung Group itself, I noticed that although Samsung is large in scale, its shareholding structure is relatively closed, mainly concentrated in the Lee family and a small number of South Korean domestic capital."

This is detrimental to Samsung's future globalization efforts and its ability to withstand risks.

Li Bingze's eyelids twitched; he sensed something was amiss.

Samsung has been a family business since it was founded in 1938 by Lee Byung-taek.

Today, Samsung's shareholding structure is indeed simple. Although it is not solely owned by the Lee family, the Lee family is the absolute controlling shareholder and actual controller of the company. As the founder, Lee Byung-taek has always firmly grasped Samsung's management and decision-making power.

"I plan to conduct a strategic financing round for Samsung Group with $2 million in cash, and acquire a 20% stake after the capital increase and share expansion." Lin Haoran's voice was firm and unquestionable.

"2 million US dollars? 20%?" Li Bingze exclaimed in shock, then realized he had lost his composure and forcibly suppressed the turmoil in his heart.

This price is blatant robbery!

Samsung Group's total sales last year were approximately $60 billion, but its net profit was not high due to significant investments in new areas.

However, given its vast assets, market share, brand value, and future growth potential as one of South Korea's top conglomerates, its overall valuation, even before it went public, is conservatively estimated at around $20 billion.

Lin Haoran wanted to take 20% of Samsung for $2 million, which is almost half of the fair market value, forcibly becoming a major shareholder of Samsung!

Does that mean the entire Samsung Group is only worth $10 billion?
This is not only a financial loss, but also a serious dilution of the Li family's control and a near-humiliating price-cutting!

“Mr. Lin, is this ratio and price... is it not quite in line with Samsung’s actual value? After all, Samsung is a business giant in South Korea.” Lee Byung-taek’s face was ashen, and his voice was hoarse.

Lin Haoran smiled faintly and interrupted him: "Chairman Li, value is relative. In a favorable situation, Samsung may be worth 20 billion US dollars or even more."

But now, with its semiconductor lifeline in someone else's hands, potential obstacles to international financing, and bottlenecks in the introduction of core technologies, Samsung's value needs to be reassessed.

The $2 million is not just money to buy Ping An; moreover, becoming a shareholder brings more than just $2 million.

Did you know that I became a director of Citibank because the chairman of Citibank personally came to Hong Kong to invite me to join, and he even offered me half of the bank's market value to raise funds for Citibank? If Chairman Li investigates this matter carefully, he should know that I am not lying.

My influence in Hong Kong, my connections in Southeast Asia, my influence in the United States and the United Kingdom, and my judgment on global industry trends—these intangible assets may be more valuable to Samsung's future than $2 million in cash.

These words left Li Bingze speechless.

The other party is right. Samsung is now like a fish on a chopping board. If it cannot expand beyond the South Korean market in the future, its value will indeed be greatly reduced.

More importantly, Lin Hao's subsequent remarks about intangible assets struck a chord with his deepest thoughts.

Upon seeing the intelligence report about Lin Haoran's terrifying global network, Li Bingze, in his despair, couldn't help but have a twisted thought flash through his mind.

The intelligence report does indeed contain information that the chairman of Citibank personally came to Hong Kong to invite Lin Haoran to join Citibank.

If such forces can be transformed from enemies into allies or even backers, wouldn't that be a powerful boost for Samsung's future expansion beyond South Korea and into the world?
Samsung is not yet a global giant, but merely a regional one.

But the price is far too humiliating and too heavy.

$2 million, 20%, according to this assessment, wouldn't Samsung only be worth $10 billion in total market value?
This is so outrageous.

Samsung Group has been developing for over forty years, although there is no specific ranking list that shows where Samsung ranks in South Korea.

But Lee Byung-taek was certain that if Samsung went public, it would have no problem becoming the most valuable listed company in South Korea.

This is his confidence!

A company that had a high probability of becoming the most valuable company in South Korea is now valued at only $10 billion!
This is not only an underestimation of Samsung's assets, but also an extreme contempt for Lee Byung-taek's life's work!
A surge of anger rushed to Li Bingze's head, and his resentment and unwillingness almost made him blurt out words of refusal.

But his remaining rationality acted like a cold shackle, tightly restraining his emotions that were about to spiral out of control.

He could almost hear the faint sound of his teeth grinding in his mouth. His hands were clenched into fists under the table, his nails digging deep into his palms, causing a sharp pain, which was the only way he could maintain a semblance of calm.

Lin Haoran seemed unconcerned about the turmoil within him.

He calmly picked up his teacup, gently blew on the floating leaves, and continued in that calm yet extremely authoritative tone: "Chairman Li, numbers are sometimes just appearances."

You can see this $2 million as a settlement payment, or you can see it as my initial investment in the future collaboration between Samsung and the Lim family.

After my investment, Samsung will no longer be just a South Korean company; it will be recognized by international capital.

In the future, when you negotiate with international giants, my influence in American, Japanese, and even British conglomerates can become your invisible bargaining chip.

"You urgently need the technology, equipment, and talent to develop your semiconductor business. My global network can provide leads and even act as a bridge. Aren't these worth the undervalued $10 billion difference?"

Lin Haoran put down his teacup and continued, "Moreover, given Samsung's current financial situation, especially the potential cash flow strain after the semiconductor plan was thwarted, Chairman Lee should know better than me whether the $2 million cash injection is a lifeline or icing on the cake."

The choice is not difficult: cling to an overvalued dream that may fail due to a funding shortfall, or accept reality, bring in strong external support, and give the dream a greater chance of realization.

Every word is heartbreaking!

Lin Haoran's every word precisely struck at the point where Li Bingze was most pained, most hesitant, and most eager.

He truly longed for Samsung to go global and become a world-class company like Sony and Siemens.

He was indeed anxious about the huge funding needs that would follow the semiconductor project;
He was indeed shocked by the terrifying energy that Lin Haoran displayed, which transcended East and West.

If, if we could draw upon this power...

Furthermore, if Samsung refuses, its semiconductor plans may fail.

If Samsung wants to expand into overseas markets in the future and offends international giants like Citigroup, it will find it difficult to move forward.

Furthermore, Lin Haoran is now undoubtedly an international giant. Offending him could result in the other party using its financial power to suppress Samsung Group's ambitions for internationalization. A sense of humiliation surged up again, but it was intertwined with concerns about Samsung's future and a desire to "leverage" his influence, creating an extremely complex and contradictory psychological state.

However, on the bright side, if a giant like Citibank is willing to let Lin Haoran become a shareholder and director at half the market price, then Samsung's actions don't seem too humiliating.

After all, Samsung and Citibank are simply incomparable.

In Li Bingze's mind, it seemed as if two thoughts were fighting: to give in or to leave in anger. The two sides were locked in a fierce struggle.

A long silence fell over the conference room; the air seemed to freeze.

Only the faint sounds of city noise coming from outside the window and the occasional soft sip of tea by Lin Haoran could be heard.

Finally, Li Bingze seemed to have all his strength drained away, his shoulders slumped slightly, and his voice was hoarse and low: "Mr. Lin, does this 20% equity stake entitle you to a seat on the board of directors and corresponding voting rights?"

Will this portion of equity be diluted proportionally if there are future capital increases or share expansions?

He's already considering the details.

This means that their psychological defenses have crumbled, and they have even accepted this humiliating clause. They are just making a final struggle and trying to secure some insignificant protection within the established framework.

A barely perceptible smile flashed in Lin Haoran's eyes, knowing that the fish had taken the bait.

"Of course, according to the investment ratio, 20% of the equity will have corresponding board seats and voting rights, which are basic shareholder rights."

Regarding future capital increases, unless all shareholders agree to subscribe in a manner different from their shareholding ratio, the capital will, in principle, be diluted proportionally. These stipulations can be included in the formal capital increase agreement.

Li Bingze closed his eyes, took a deep breath, as if trying to suppress all the humiliation and helplessness in his heart.

When he opened his eyes again, all that remained was a numb resolve: "Okay, I agree to this in principle."

Specific valuation details, investment methods, and board seat arrangements will be determined through further discussion between the two teams.

“A wise choice, Chairman Lee.”

Lin Haoran nodded slightly, as if it were just an ordinary business deal.

"Then, secondly, all my businesses include Hongkong Land Group's real estate, retail supermarkets, Hengsheng Group's financial projects, Southern Company's 711-Eleven and Lawson retail networks, Longway's consumer products, Hutchison Whampoa's foreign trade, and so on."

Samsung Group will need to provide full and unconditional support and cooperation for any business that may enter the South Korean market in the future.

Policy consultation, local relationship building, channel sharing, and priority recommendations for joint investment opportunities—what I want is for Samsung to become my most steadfast local partner in South Korea.

This provision effectively opens up Samsung's decades-long local advantages, political and business connections, and market channels in South Korea to Lin Haoran, making it a bridgehead and escort for Lin's capital to enter the South Korean market.

Samsung will transform from a potential competitor or local power into a subservient strategic partner.

Li Bingze's lips twitched bitterly, but since he had already accepted the most core and humiliating equity terms, this level of resource opening seemed to be a matter of course.

As a major South Korean conglomerate, Lee Byung-taek knew that the South Korean government was gradually relaxing restrictions on foreign investment. Even if he disagreed, the other party could still enter, though it wouldn't be as smooth as it seemed.

"Yes, Samsung will establish a top-level special task force, led by a vice chairman-level executive, to specifically address the expansion needs of all of Mr. Lim's businesses in South Korea and ensure full cooperation."

"Third, regarding semiconductors, I reiterate that I will not stop Samsung from developing semiconductors. That is your dream, and it is also South Korea's national strategy."

"I can get Citigroup and Morgan Stanley to reassess their bond issuances and resume the process. I can also speak to Sharp and get the technical negotiations back on track."

Li Bingze was greatly encouraged; this was what he had been hoping for all along!
“However,” Lin Haoran’s voice suddenly turned cold, “the acquisition of SVLT Semiconductor has been basically finalized and will soon become part of my semiconductor assets. There is absolutely no possibility of it being transferred.”

If Samsung wants to develop its semiconductor business, it must find another way; that's the bottom line.

At the same time, as part of providing technical and supply chain support, and as my support for Samsung's semiconductor business as a shareholder, Samsung Electronics must purchase goods or services totaling no less than US$3000 million annually from SVLT Semiconductor, which I am about to acquire, or from any of my future equipment and materials suppliers, for the next three years, at prices that are in accordance with fair market principles.

This not only completely severed Samsung's hopes for SVLT, but also bound part of Samsung Semiconductor's supply chain to Lin Haoran. The annual procurement amount of $3000 million is not only a transfer of benefits, but also a disguised form of supervision and influence infiltration.

Through the supply chain, Lin Haoran can gain some understanding of Samsung Semiconductor's technology roadmap, capacity planning, and financial situation.

Li Bingze felt a mix of emotions.

Losing SVLT Semiconductor was painful, but in return, it brought more crucial financing channels and technology acquisition pathways, so it can be considered a loss on one front.

As for the designated procurement of 3000 million yuan per year, although it feels a bit like being tied down, it seems acceptable considering the support promised by the other party.

After all, semiconductor manufacturing is inseparable from the global supply chain, so it doesn't matter who you buy from.

Besides, it's only a three-year timeframe.

As a major manufacturing giant in South Korea, Samsung has a huge demand for chips and other components.

As long as the price and quality are acceptable.

This is also the biggest reason why Li Bingze sought to develop semiconductors; he saw the importance of semiconductors in the future technology industry.

“Okay, we’ll drop the SVLT semiconductor issue. As for the $3000 million annual related procurement, Samsung can accept it as long as the supplier’s qualifications and prices meet our requirements,” Lee Byung-taek said in a deep voice.

"Fourth," Lin Haoran's tone softened somewhat, "in response to the sincerity shown by Samsung above, I promise that while Samsung is fully implementing all the terms of the agreements we have reached today, neither I nor any of my affiliated companies and funds will launch any proactive or malicious business competition or suppression against the Samsung Group."

We can even explore collaboration opportunities in third-party markets.

This can be seen as a promise of a relatively stable external environment to Lee Byung-taek, provided that Samsung behaves itself.

"fifth."

Lin Haoran concluded by looking at Li Bingze's face, "Regarding 711-Eleven and Lawson convenience stores, I can grant Samsung Group the regional franchise rights for these two brands in South Korea, allowing Samsung to open new stores in designated areas."

Li Bingze's gaze sharpened. This was the initial trigger for the conflict, and also the target he had once coveted.

"However, the more than 1,000 directly operated stores that are already in operation will continue to operate independently, with ownership and core management rights remaining unchanged, serving as brand standards, training centers and core supply chain nodes."

Samsung acquired the rights to develop incremental markets, not existing assets.

This means that Samsung has lost its readily available and massive cash flow network and needs to invest money and time to explore new markets.

But at least they've secured their ticket to this high-growth industry.

"In addition, the intellectual property rights and standards of the brand's core operating system, supply chain management technology, product development, store manager and employee training system are completely controlled by 711-Eleven and Lawson's global headquarters, Southern Company."

As the licensee, Samsung must strictly adhere to all operating standards and is not allowed to modify the core system on its own.

All goods procurement must be done through channels designated by Southern Company or suppliers certified by it. In short, Samsung is the implementer and operator of standards, not the controller.

This clause completely eliminates any possibility that Samsung could learn its core business model, build its own supply chain, or eventually establish its own independent business or take over the company by using convenience stores as agents.

Samsung can only earn the prescribed operating profits within this system, becoming a "hand and foot" of Lin Haoran's retail empire in South Korea, rather than its "brain".

Lee Byung-taek understood. This was tantamount to using the agency rights to bind Samsung to Lin Haoran's retail chariot, and binding them tightly so that they could only contribute but not touch the core business.

This is far removed from his initial ambition to influence or even control parts of the supply chain by controlling the channels.

In other words, Samsung can only earn a small fee in the convenience store industry.

But things have come to this point, and getting the agency rights is better than being completely excluded from this market.

He remained silent for a long time, as if digesting the last piece of bitter cake, before finally nodding slowly: "The specific geographical scope, term, franchise fee, and operating standards of the agency rights need to be further discussed."

However, I urge you to add one condition: regarding the supply chain, the Samsung Group hopes to be responsible for supplying a portion of the products, such as some Samsung products manufactured in South Korea.

"No problem!" Lin Haoran readily agreed.

After all, 711-Eleven and Lawson's product supply chains in South Korea are partly sourced from South Korea, and it's unrealistic to expect all products to be imported.

Li Bingze breathed a sigh of relief; thankfully, the other party wasn't as domineering as he had imagined.

“In that case, I agree on behalf of the Samsung Group,” he said solemnly.

Lin Haoran smiled with satisfaction. He stood up again and extended his hand to Li Bingze: "President Li, I am very happy that we were able to reach a consensus."

Today's negotiations may have been difficult, but I believe this will be the starting point for Samsung to move towards a broader future. I look forward to future cooperation with Samsung and with Chairman Lee.

Li Bingze also stood up and grasped Lin Haoran's hands with both of his.

His palms were a little cold and slightly sweaty.

He forced a smile, though it looked worse than a grimace.

"Thank you, Mr. Lin, for giving Samsung this opportunity. We will assemble a team as soon as possible to coordinate all the agreement details with the person in charge you designated and implement it promptly." (End of Chapter)