2003: Starting with Foreign Trade

Chapter 1001 A Battle Between Billionaires

June 17, 8:00 AM European time.

At this time, it was pre-market time for US stocks and the midday break for Asian stock markets. Weilai's official website published a lengthy announcement and detailed information about the merger and acquisition transaction.

At the same time, an online press conference was being held simultaneously in Michigan. Tan Jincheng and Ford CEO Jimmy Farley jointly attended the online press conference, which was broadcast live to the world in Chinese, English and German.

Global social media platforms such as XH, PB, and LT simultaneously broadcast Wei Lai's concept video about the transformation of Ford's German factory. Meanwhile, Li Xiang was holding a company-wide meeting at the European factory.

Li Xiang announced on-site that each employee would receive a transformation bonus of 1500 euros, using tangible benefits to appease the employees. Considering that Europeans do not have the habit of using large amounts of cash exceeding 100 euros, the 1500 euros distributed on-site were in 20-euro denominations.

Stacks of blue cash were distributed to the employees on site, which greatly alleviated the anxiety of these former Ford employees. At present, traditional car companies around the world are laying off employees one after another. It is impossible for them not to be worried.

"Indeed, this method of distributing gold is the most appealing to people all over the world."

Watching the employees happily receive their money, Li Xiang chatted with the deputy general manager of the overseas company. Yu Liguo was responsible for assisting with negotiations in North America, while the deputy general manager of the overseas company was responsible for assisting Li Xiang with various matters in Europe.

"Our boss often jokes that the world is just a giant makeshift operation. Don't make things too complicated, and don't overestimate these foreigners. See how easily we've handled things now?"

To appease the interests of several parties, the acquisition process is certainly not simple, but in essence, it boils down to offering money and making promises. For Ford, it's about offering money, a figure that satisfies the other party.

As for Germany, it's all just empty promises. The promise they're making is to transform the factory into a model of a green factory, making it a symbol of Europe, which is very much in line with the current political correctness.

Z-type entrepreneurs don't really care about specific technology transfers, or rather, they don't understand them. Compared to business owners, they care more about the underlying meaning or whether it can bring them some benefits.

"The 400 million euro transaction price includes the overall transfer price of the factory, technology licenses, and employee resettlement funds. In addition, Ford retains a 5% stake and a 0.5% to 1% share of future production after the electrification is mass-produced. Therefore, this is not an acquisition in the traditional sense, but more of a strategic cooperation."

Ford, a century-old company, is transferring its advanced automobile factory to an Eastern automaker that is less than 20 years old. Although it is beneficial to the company, it is still somewhat embarrassing to talk about it. In addition, it needs to downplay the acquisition and overcome the resistance from the West.

Both sides quickly reached an agreement, and the statements they released to the public all revolved around the theme of strategic cooperation. At the press conference, Ford's CEO emphasized the theme of strategic cooperation once again.

The biggest question from the outside world is the overall price of 400 million euros, because in terms of the overall valuation of the Ford factory, 400 million euros is obviously a discount, and the valuation is far lower than expected.

"The 400 million euros is the net asset value, not the true value. Including future investment in renovation and R&D, the overall valuation will reach 12 billion euros, which will significantly increase the actual value of the factory and is more in line with the interests of both parties."

Regarding the issue of the low valuation, Tan Jincheng answered reporters' questions in Chinese. Tan Jincheng, who will soon turn 36, still has a youthful face, and his appearance at the joint press conference, broadcast live globally, was still very impactful.

Sitting on this stage is a billionaire worth hundreds of billions of dollars, and he's so young. For Americans who idolize individual heroes, this is even more impactful.

At the end of last month, the market value of Weilai officially exceeded one trillion yuan. The market value has been rising continuously over the past two years. No matter which company it is, Tan Jincheng will no longer concentrate a large number of shares in ByteDance Engine.

On the one hand, it's too conspicuous, and on the other hand, it's not safe enough. Wei Lai, Chengzi, and Shanchi Technology's shares have all undergone multiple rounds of dilution and splitting. On the surface, Tan Jincheng's shareholding is not much, but this does not affect his control over the three major group companies.

Currently, Tan Jincheng maintains a 67% stake in Flash Group through his personal account, ByteDance's advertising platform, and other investment companies. Flash Group already has two listed companies, as well as directly controlled companies such as Jinpeng Industry, Jinyi Industry, and Leichi New Energy.

Therefore, Flash Group also underwent a round of equity reform. Through the equity reform, core management personnel such as the city investment company, Zhang Xupeng, and Wang Qinghua, as well as board members, also acquired a portion of the equity at the group headquarters.

By consolidating the majority stake held by major shareholders in various subsidiaries and converting the equity into that of the group's parent company, the stability of the group can be better ensured, and the interests of all parties can be guaranteed.

Currently, Shanchi Group's shareholding structure is as follows: Tan Jincheng holds 67%, core management and employees hold 11.5%, Beicang City Investment holds 10%, Zhang Xupeng holds 7.25%, and Wang Qinghua holds 4.25%. The shareholding structure is clear and transparent, and Tan Jincheng has absolute control over the group.

Another major advantage of handling the equity in this way is that the group's parent company is not listed. If anyone wants to cash out the equity, they must obtain the consent of Tan Jincheng and all shareholders.

Cashing out in the primary market is not as convenient as in the secondary market. After being listed for many years, the shares held by core members and investors have long been fully tradable, and cashing out only requires a single announcement.

In listed companies like FlashTech and Bafang Electric, various stakeholders retain a portion of the equity. This arrangement can satisfy the needs of some people who want to "improve their lives," but keeping it within a certain proportion can also avoid investor resentment.

For example, Zhang Xupeng reduced his holdings of FlashTech shares worth 100 million yuan through the secondary market. For a company with a market value of nearly 30 billion yuan, this is not a big deal, right?
At the same time, this also serves as a constraint on Tan Jincheng himself and all stakeholders, ensuring the stable operation of the group. In Tan Jincheng's view, Flash Group has always been his fallback plan, as evidenced by his 67% shareholding.

Since it mainly focuses on light industry and trade, the overall valuation of Flash Group is not high, at around 500 billion RMB. This is because it has two listed companies, and the stock market has performed well in the past two years, so there is still a certain amount of bubble.

Compared to the absolute control of Flash Group, Tan Jincheng's shareholding ratio in Weilai Group and Orange Group, which are more capitalized, is not as high. Financing dilution and a small amount of share reduction and cashing out have reduced Tan Jincheng's shareholding ratio in these two companies.

However, as of now, Tan Jincheng still holds 47.37% of Weilai Group. Although this is less than the 51% relative control, he still has veto power. Without considering Weilai's secondary listing, this shareholding ratio is sufficient to ensure Tan Jincheng's control over the company.

Orange Group, which has been the most heavily capitalized, now has Tan Jincheng's shareholding ratio reduced to 34.55%; this is simply because last year, before Jack Ma made any special moves, Orange Group had a round of financing.

In addition, at the same time as Xiaomi Group's reduction of holdings, Orange Group also reduced its holdings in the US and Hong Kong stock markets. 2020 was the peak year for the Internet industry, and the market value was almost at the peak of major Internet companies. If they did not take this opportunity to reduce their holdings, it would be a bit of a disservice to being listed on the US stock market.

The tricks that Jack Ma pulled not only hit Ali, but also dealt a huge blow to the entire internet industry. After the tricks, the overall market value of domestic listed internet companies evaporated by nearly two trillion US dollars from its peak, and the amount of financing decreased by 40%.

Besides Ali itself, the worst off is Kuaishou. Last October, Kuaishou was valued at $500 billion, but when it went public this year, it not only broke its IPO price, but its valuation dropped to only $350 billion.

Orange Group's current market capitalization is between RMB 4500 billion and RMB 4800 billion, which is comparable to that of Baidu and Xiaomi. These three companies often take turns surpassing each other in market capitalization.

With Weilai's trillion-yuan market capitalization and Orange and Flash's combined 5000 billion yuan, the three major groups contributed more than 6600 billion yuan to Tan Jincheng's net worth. Including Meizu and other companies' equity, Tan Jincheng's actual wealth exceeds 7000 billion yuan.

Based on the current exchange rate of RMB to USD, Tan Jincheng's personal wealth ranks seventh globally, after Warren Buffett and that increasingly alien-like post-80s individual.

Also on the list of the top ten globally is Mr. Zhong, whose wealth soared to $920 million this year thanks to the surge in the prices of Wantai Biopharmaceutical and Nongfu Spring, and his stake in Nongfu Spring exceeding 80%.

In terms of the extent to which their net worth has skyrocketed, both Musk and Tan Jincheng achieved their success step by step, benefiting from industry booms and exhibiting a certain degree of bubble-like growth. Only Mr. Zhong can be called truly amazing.

He amassed a fortune of hundreds of billions of dollars by selling water, and his IPO performance ranked among the top ten globally.

"Was the union forced to compromise? No, our agreement terms passed the law firm's labor law compliance review and are fully compliant with the Co-Decision Act. We have always done a good job in respecting workers, so please don't look at us with strange eyes."

"As for whether the technology will be transferred to our country? No, it won't. All the factory's technical data will be stored in the IBM cloud in Frankfurt, subject to the EU's General Data Protection Regulation (GDPR)."

"Like Apple and Tesla, we respect local laws. Moreover, in terms of electrification technology, WIL has always been at the forefront. We hope you can test drive our latest ET5 model, which is selling very well in Europe, before asking your questions."

Faced with these sensitive questions, Tan Jincheng did not back down. He stated his position with great confidence, and his words showed his confidence in Wei Lai in all aspects, which made the domestic audience feel very relieved.

During the midday market break, in this globally broadcast press conference, Tan Jincheng answered a series of sharp questions, allowing global audiences to learn about the details of this acquisition and, for the first time, directly witness the adaptability of the world's youngest billionaire.

Among the world's top ten richest people, Alien was born in May 1984, one year older than Tan Jincheng. This internet social media founder, who became the world's youngest billionaire at the age of 23, is no longer the world's youngest billionaire.

The online press conference lasted an hour and a half, and the participants were all well-known global media outlets. Some media outlets, such as the BBC, which were not friendly to us, asked all sorts of difficult questions, but many of them could not be avoided.

Although an agreement has been reached with Ford and Germany, and North America has also softened its stance under the mediation of Wall Street capital and Ford, there is no rule out the possibility that North America or even Germany might renege if public opinion becomes too strong. Therefore, no matter how detailed the questions are, as long as they do not involve core secrets, both Ford's CEO and Tan Jincheng must answer them seriously, even if it is the BBC.

However, Tan Jincheng's appropriate handling of the situation and his confident and composed attitude throughout the press conference impressed many reporters.

"This little guy performed very well, his answers were very appropriate, and he made us look good. Now it seems that the acquisition should be fine."

Domestically, this globally-gathering online live stream attracted a large number of onlookers and certainly garnered attention from various parties, especially higher-level regulatory authorities. Multiple parties provided assistance for this acquisition, which signifies that our automakers are truly going global.

"Yes, I didn't expect him to be so relaxed, especially since this is a global live broadcast."

As the head of a well-known company, Tan Jincheng naturally has many interviews and events. He has many opportunities to face the media, but he has always maintained a relatively low profile.

Especially regarding international media, Tan Jincheng has given several exclusive and joint interviews to international media, but those were many years ago. To be honest, when this online press conference was to be broadcast live to a global audience, some people in China were still a little nervous.

In addition, the timing of the live broadcast is very conducive to its large-scale dissemination, regardless of the region. Moreover, Tan Jincheng's every move will cause turmoil in the global capital market.

However, after a few questions, their concerns disappeared. The transaction could be completed as long as the North American side officially confirmed and stamped the document.

From the start of the acquisition in early May to June 17, it took only a month and a half for Wei Lai to complete all the negotiations. The entire negotiation process progressed rapidly after Tan Jincheng flew to North America.

Certain core interests are addressed through one-on-one communication, reducing unnecessary communication time.

Following the press conference, shares of Weilai Co., Ltd. surged rapidly at the opening of the A-share market in the afternoon, closing up 3.56% for the day. Ford shares also soared 7% in pre-market trading, closing at $15.32 and regaining a market capitalization of over $600 billion.

Interestingly, Tesla's stock price fell steadily from pre-market trading today, closing down nearly 3% throughout the day. The market views the planned acquisition of the European car factory as a way to block its competitor, Tesla.

Since news of the potential acquisition of Ford's factory began circulating in mid-May, coupled with a sales decline caused by a public relations crisis, Tesla's stock performance has been less than satisfactory. From early May to mid-June, Tesla's overall stock price fell by 14.74%, with the largest drop exceeding 20%.

Musk also lost his title as the world's richest man due to the stock price fluctuations during this period, and was surpassed by Bezos.

According to a series of data released by Tan Jincheng at the press conference, the European factory, after its renovation, will have an annual production capacity of 15 vehicles, mainly used to produce the ET5 and ES3, two models that are currently very popular in the European market.

In terms of long-term planning, the European factory will eventually reach a capacity of 30 vehicles through investment and expansion, but this depends on sales volume. In terms of planned production capacity, the final production capacity of the European factory will be lower than Tesla's 50 vehicles.

However, in terms of initial production ramp-up plans, both companies set an annual production of 5 vehicles, equivalent to a weekly production of 1000 vehicles, which meant that the two companies were on the same starting line.

This is not good news for Tesla. Their Berlin factory has been delayed due to environmental issues. Although it is scheduled to officially start production next March after various modifications, both sides have nine months to prepare. No one knows what will happen.

The incredibly audacious Tan Jincheng wasn't afraid of the impact the failed acquisition would have on Wei Lai, because he could afford to execute the acquisition, which was mostly based on overseas assets. Therefore, after communicating with Ford, he had already modified some unimportant projects that did not involve technological investment.

Examples include live-streaming the dismantling of abandoned boiler rooms. In Europe, besides coordinating with various parties, Li Xiang did mostly these kinds of things, which also served as a way to find some work for the factory employees.

This is an extremely bold move. If it is rejected, these actions would mean being taken advantage of, and even Ford would have to bear part of the cost.

However, Tan Jincheng didn't care. Being rejected would only result in a loss and damage to his reputation, but once it was officially approved, there would be many benefits. Now, Weilai's European car assembly plant was trying to race against Tesla.

Whoever starts mass production first, even if production capacity is limited and only a few hundred vehicles can be produced per week, will have a huge advantage.

The underlying struggle behind this deal is Musk's attempt to use his influence to prevent the acquisition from being completed. First, after the news broke, Tesla's investor relations department suddenly released a plan to expand production at the Berlin factory, which was suspected to be a demonstration.

On the same day the press conference ended, Musk himself tweeted: "German factories? They should learn how to produce efficiently first, instead of relying on government subsidies."

The tweet was followed by a video showcasing the robots at Tesla's North American factory, with 120 robots per 100 people, a world-leading figure.

In the comments section of this tweet, Musk also tagged the official account of Weilai Overseas Company. Since Tan Jincheng did not tagged the account, Musk also followed the official account of Weilai Overseas Company.

This is a showdown in production capacity, and the provocation is quite obvious, which is also in line with Musk's eccentric personality. In addition, although there is no evidence for that environmental protection event, Tan Jincheng thinks that it was probably a small trick by this guy.

In terms of practical benefits, besides creating trouble for Tesla and Ford, the biggest advantage is diverting environmentalists' attention from the Tesla Berlin Gigafactory.

In terms of actual topic popularity, from mid-May to the press conference, environmentalists did indeed pay much less attention to Tesla.

"Haha, reply to him."

Tan Jincheng quickly noticed the tweet that had sparked public opinion. After the press conference, the market performance of the three companies was clear, and Musk was obviously getting restless.

"Thank you for your attention, Mr. Musk. We are striving to learn from Tesla's speed, but we adhere even more firmly to the Nordic philosophy of zero compromise on safety. Also, could SpaceX, owned by Mr. Musk, provide us with solar panels?"

Musk mocked Saarland for not expanding overseas fast enough and relying on government subsidies (on the day of the press conference, the Saarland government announced it would provide €100 million in green transition subsidies, including tax breaks).
Tan Jincheng, on the other hand, did not back down, subtly mocking Tesla's frequent safety incidents and diverting attention by creating the illusion of cooperation.

"There's no point in arguing with him, but we can't show weakness either."

The best approach is to keep Musk at the level of vague banter rather than launching a full-scale media war. This would benefit both sides. Fortunately, while Musk is arrogant, he is not stupid. He engages in fierce verbal battles, but he hasn't touched on the core issues.

If he brings up ZZ, although it might actually block the deal between two competitors, it would be incredibly foolish and would not benefit either himself or Tesla.

In China, Ford is as powerful as Tesla, just as it is in North America and even in Europe.

The verbal sparring with Musk on Twitter was just an appetizer after the press conference, which increased the heat between the two camps. Tan Jincheng even privately discussed with Musk the possibility of SpaceX supplying solar panels to the factory.

Like Tan Jincheng, Musk's businesses are also diverse. Tesla has also been investing in the energy sector for many years, and there are indeed many possibilities for cooperation between the two companies in the industrial chain.

Domestically, Tesla can utilize WILTER's supply chain, while overseas, WILTER can also cooperate with Tesla's supply chain, creating a competitive yet cooperative dynamic between the two sides. This is the norm for modern enterprises.

June 24, Berlin, a week after the press conference.

A grand signing ceremony was held in the presence of authoritative media from multiple countries. Attendees included Tan Jincheng and Jimmy Farley, along with Ford executives, German representatives, and EU leaders.

In addition, there were labor representatives and representatives from the supply chain, including BASF and Bosch, making it a very high-profile event.

"Alright, I can finally go back home."

After signing several documents and giving some interviews, Tan Jincheng finally breathed a sigh of relief. He had spent almost the entire two months abroad since arriving in Europe in early May.

This is the longest time he has spent abroad in two lifetimes. For Tan Jincheng, who doesn't like going abroad, it was a huge ordeal. Not to mention, he was almost sick of the so-called Ford electric package during his time in North America.

(End of this chapter)