"I have contacted the management of Marconi, but it seems that their board of directors is not very enthusiastic about selling the company, even if we increase the acquisition price to 750 million pounds."
Amber Sheehan, now CEO of DS Holdings, told Barron's:
"Although Marconi's performance has not been very good over the years, especially compared with other telecom equipment manufacturers, more than half of their revenue still comes from the UK, but at least it is still the largest telecom equipment manufacturer in the UK and can receive some orders."
After mortgaging 4 billion pounds from Northern Rock Bank, Barron had 1 billion pounds left, except for 3 billion pounds used to repay the high-interest financing from Barclays Bank and Goldman Sachs. Next, Barron prepared to make another acquisition, and this time his target was Marconi.
Marconi Company was originally formed by the merger of Marconi Wireless Telegraph Company, British Electric Company and General Electric Company.
Marconi Wireless Telegraph Company was founded in 1897 and was originally named Marconi Wireless Telegraph and Signal Company. It was the first company in Britain to specialize in the manufacture of radio equipment. In 1922, it founded the famous British Broadcasting Corporation (BBC) - of course, the BBC later became independent and became a public institution.
Currently, Marconi mainly operates communications and IT businesses, with three divisions: the communications division, which mainly operates communications networks and mobile communications businesses. In addition to its headquarters in the UK, it has branches in Italy and the United States.
Marconi currently has 56,000 employees. In 2001, their sales reached 6.942 billion pounds, of which research and development expenditure was 669 million pounds and profit was 807 million pounds. Sales and profit increased by 21% and 7.6% respectively compared with 2000.
However, since 2001, with the overall downturn in the telecommunications industry and intensified competition, Marconi, which does not have much scale effect, has seen its business decline and its total assets shrunk significantly.
Even after tightening its belt, Marconi is considering major layoffs.
But it seems that even now, they don't want to be acquired.
The main reason why Barron wants to acquire this company is that he hopes to expand O2 Telecom's business, increase research and development of communication technology and equipment, and use this to cooperate with companies such as Huawei to develop the next generation of 4G networks.
But now it seems that compared to the situation when Marconi Company was acquired in the previous life, there is more hope for Marconi Company now.
In the previous life, in 2005, Marconi was put up for sale. Huawei offered 682 million pounds to acquire the company, but was eventually snatched away by Ericsson at nearly double the price of 1.3 billion pounds...
By that time, the Marconi company was in dire straits and a sale was inevitable.
Although it was once a glorious company as a long-established British communications equipment manufacturer, under the influence of increasingly fierce competition in the global telecommunications market, Marconi, which lacks economies of scale, has been unable to adapt to the laws of market competition. In recent years, it has been in a bleak operating situation and has been relying on the domestic market to survive.
When British Telecom (BT) announced the list of its "21st Century Network Preferred Suppliers" plan and the tender contracts with a total value of US$146.6 billion in early 2005, Marconi was greatly disappointed because they were completely frustrated in this tender!
This not only caused Marconi to lose nearly half of its revenue, but more importantly, it lost the meaning of Marconi's continued existence as an independent telecommunications equipment supplier.
Under the influence of the collapse of both the global and domestic markets, Marconi's financial situation deteriorated sharply. The first financial report released by Marconi showed their continued losses, and they eventually had to sell in order to survive.
So it seems that now is not the right time to acquire Marconi, unless Barron offers a price that they cannot refuse.
But the value of this company to Baron is not worth him paying too much premium to acquire it.
Acquiring a company also requires timing. Often, when many companies conduct mergers and acquisitions, they take advantage of the other party's market value hitting a low point and the other party can complement their own business, or the other party has synergy with their own business.
When a company is doing well, few are willing to be acquired, and such acquisitions require an extremely high premium.
But Barron was not in a hurry. He said to Amber,
"Raise the offer to 800 million pounds. If they still can't accept it, forget it."
Because he knew that there would be another good opportunity soon.
…
It was almost February, and Barron once again traveled to America on a Gulfstream G450.
"Hello, Mr. Chen, nice to meet you today."
"Your Highness, the Duke of Cavendish, to be honest, I am still very curious about today's meeting. Also, I have to say that your Chinese is very good."
"Haha, you're not the first person to praise me like this, but I'm still very happy. As for the purpose of inviting you here today, it's because I have a position that I think is very suitable for you..."
In front of Barron was a Chinese man with a little gray hair. His name was Hock Tan, and his Chinese name was Chen Fuyang.
From his English name, we can tell that Chen Fuyang is from Hujian, because Tan is often the English spelling of "Chen" in Minnan dialect.
In fact, in the West, not only foreigners but many Chinese people are easily confused by different translations of the same surname.
For example, if you speak Mandarin, you will generally use Chen as your English surname. If you speak Cantonese, you will often write it as Chan, such as the Kung Fu superstar Jackie Chan. If you speak Minnan dialect, you will use Tan. If you speak Hakka, you will often use Gin...
Chen Fuyang, 51 years old this year, was born in Penang, Malaysia, where there are many Chinese people. Later, at the age of 18, he went to the United States to study. He holds a bachelor's and master's degree in mechanical engineering from the Massachusetts Institute of Technology, and an MBA from the Harvard Business School.
After graduation, he joined traditional American giants such as General Motors and PepsiCo, where he held senior management positions.
Chen Fuyang then served as managing director at Hume Industries and Lijiapo venture capital fund Pacven Investment Company.
After leaving Pacven Investments, he also joined home computer maker Commodore International, where he served as vice president of the company, primarily in charge of financial operations.
In August 1994, Chen Fuyang joined the semiconductor solutions company Integrated Circuit Systems Inc. (ICS), where he served as the company's senior vice president, CFO, COO, president and CEO.
Yes, at this time he was the president and CEO of ICS.
If you know that ICS would be acquired by Silicon Valley semiconductor company IDT for US$1.7 billion more than a year later, you can see that ICS is not small in scale.
It can be said that the 51-year-old Chen Fuyang has already achieved success. What he is curious about is what is the purpose of this young British Duke meeting him this time?
After all, from the current perspective, this young duke is also very well-known in America, and he owns many industries, but none of them have anything to do with his current job.