Chapter 467 Confident M&A Team

The starting point of the Second Eurasian Continental Bridge is Lianyungang, China, and the end point is the Port of Rotterdam, the Netherlands, located at the mouth of the Rhine and Maas rivers and is known as the gateway to Europe.

Looking down from the plane, you can see that there are many rivers in the city and various kinds of boats parked on the riverside.

As cars drive along the city streets, unique windmills can be seen everywhere.

What impressed Guo Yang most was that the windows of the residents' floors were decorated with colorful flowers.

This shows how much the Dutch love flowers, and it makes sense that they are known as the Kingdom of Flowers.

In the hotel, Guo Yang and Yu Qin met Miao Lanchun who arrived earlier, and Ren Fu, the head of the European plant extract business.

"You must have been exhausted from the journey. Boss, Mr. Yu, let's go eat first, take a night's rest, and adjust to the time difference."

"Okay, let's eat something first and talk about the current situation."

Ren Fu has lived in Europe for several years and is quite familiar with the area. He can arrange both Chinese and Western meals.

Guo Yang looked at the menu and finally ordered the most simple Lanzhou ramen. The taste was unexpectedly good, the chili was very fragrant, and the portion of beef was generous.

“Are there ramen restaurants in Rotterdam, too?”

“Yes.” Ren Fu smiled and said, “I asked my nephew to open a ramen restaurant here. All the ingredients were brought over from China. It’s very popular!”

"No wonder the taste feels a bit authentic. I'll go to your nephew's shop in a couple of days if I have a chance."

Guo Yang was eating noodles, and occasionally a piece of meat, which made him feel very refreshed.

Everyone else also had their own food, various kinds of food, but Ren Fu was the only one who was chewing cheese slowly and seemed to be enjoying it.

Perhaps noticing Guo Yang's look, Ren Fu said, "The average height of the Dutch is the highest in Europe. Some people say it's because they like eating cheese and riding bicycles."

Yu Qin on the side curled his lips, "Why, you still want to grow taller at your age? Aren't you afraid of high cholesterol?"

"This is also a work requirement."

Ren Fu said: "Why do the Dutch consume a lot of dairy products? Because the animal husbandry is well developed, and the support for the well-developed animal husbandry is its strong feed industry!
If you want to acquire Provimi, you must have a detailed understanding of its upstream and downstream relationships in the industry.”

After hearing Ren Fu talking about work, the others ate more quietly and pricked up their ears to listen.

The Netherlands is the most densely populated country in Europe. It has a small area and low terrain. A quarter of its land is below sea level and there is not much arable land.

The agricultural production conditions are inherently insufficient.

If it were an ordinary small country, it would probably just accept its fate and import food honestly.

But the Dutch have become the world's second largest exporter of agricultural products, including flowers and bulbs, eggs, fresh milk, beef, mutton, pork, apples and pears, vegetables...

A truly modern agricultural power.

In the agricultural structure of the Netherlands, animal husbandry accounts for 50%, and almost every person has one pig and one cow.

The large number of livestock also means that the Netherlands has a huge demand for feed, which has led to its developed feed industry, of which silage corn and forage grass are important components.

According to information Ren Fu has, there are 72 compound feed producers in the Netherlands, including five large companies.

Such as Taigao Group, Agrifirm, DSM...

Among them, Taico and DSM are both among the world's six largest feed giants and are also potential acquirers of Provimi.

Provimi focuses on the field of animal nutrition, mainly providing high-quality premix products, with business in more than 30 countries.

Premix is ​​a feed product that is premixed with multiple nutrients, additives and medicines.

Different formulas can meet the nutritional needs of animals at different stages.

It cannot be used to feed animals directly, but is an important component of complete feed.

On the surface, the production threshold for premixes is very low, with two to three thousand companies producing them in China.

But fundamentally, this is a high-tech product, but most companies and products are just making do with it.

In this field, Provimi ranks among the top five in the world and is also one of the upstream suppliers for many feed companies in the Netherlands.

It is not yet known how many potential companies are interested in it.

"in the country, in addition to Jiahe, there are media reports that New Hope is also interested in this acquisition."

Ren Fu provided a new piece of information that surprised everyone present.

Guo Yang joked: "It seems that New Hope is not very satisfied with the service provided by Quanwang!"

Yu Qin smiled and said, "The media is just trying to get some attention. New Hope is unlikely to get involved. Even if they do, we won't be afraid."

Competition in the feed industry is fierce today.

Some companies consider it very good if the gross profit margin can be maintained at 5%.

The acquisition of Provimi would require at least 10 billion yuan of funds. Even if New Hope Group wants to take the lead, it may be unable to do so.

Miao Lanchun had also finished eating by this time, wiped his mouth, and said, "National Grain Feed has been making a lot of moves in China recently, in South China, East China, and along the Yangtze River Basin."

Under the leadership of Ning Gaoning, Guoliang launched the full industrial chain strategy more than two years ago.

The feed industry is the downstream of soybean and corn processing, and is naturally also within the national grain map.

Yu Qin raised his eyebrows. "In the past two years, Guoliang has been making continuous acquisitions at home and abroad. Its debt ratio is very high. It should not be involved."

"The main competitors should be Taigao and DSM."

Guo Yang coughed and said, "Don't forget Jiaji, this may be the strongest hidden competitor."

In the original time and space, Cargill established a huge animal nutrition empire, but its market share was still limited at that time.

The expansion of its business scale began with the acquisition of Provimi, and then it completed several horizontal mergers and acquisitions to form its final scale.

In later generations, Guoliang surpassed other grain traders and became the second largest grain producer in the world, but there was still a huge gap with Cargill. Well, it was still about half a percent of Guoliang's share.

Animal nutrition is one of the main areas where the gap is widened. But at this moment, Yu Qin and others obviously have not paid enough attention to Cargill.

Yu Qin said: "According to the information provided by Avic Investment Bank, Cargill may have problems with financing, and it has never conducted such a large merger and acquisition in the past."

Miao Lanchun also added: “In addition, every important decision of Cargill must be discussed with the shareholders of the sixth largest Cargill family, and can only be implemented after approval.

There are no Cargill family members in Cargill management today.”

Cargill is a private company, not listed, with difficulty in financing and cautious investment decisions. 100 family members hold about 90% of the shares...

One by one, the shortcomings were pointed out.

Most of them come from analysis by investment banks and various external consulting teams.

This is the traditional perception of Cargill.

Guo Yang thought about it for a while and reminded them again. Yu Qin and Miao Lanchun also said that they would discuss it with the M&A team again.

In addition to the Golden Harvest team, the M&A team also hired investment banks, financial, legal, tax consultants, and public relations companies.

Among them, Avic Investment Bank is the core.

Kerston Cole is a senior M&A consultant at an investment bank. He has worked with Golden Harvest several times and was the lead in Tianhe's acquisition of Dow Brazil.

But this was the first time Guo Yang met Keston.

An old white man with slightly gray hair and obvious wrinkles, but his figure was still in good shape. He was wearing a black suit, a white shirt and a gold-finished tie.

At this time, the old man walked towards Guo Yang in high spirits, shook hands and greeted him.

"Wow, Guo, you are so young. Such a young rich man should appear in the Internet field, not agriculture."

"Haha, Kerston, you look very energetic and it seems that you are full of confidence in this merger."

The two of them flattered each other for a while before entering the conference room, which was already full of people.

This is a mobilization meeting.

There were dozens of people attending the meeting, which could be called a large team. The meeting was chaired by Kerston and Yu Qin, and Guo Yang was also listening on the stage.

“There was only one week left to submit bids, but our employer had been preparing for two years.”

“The advantage of Quanwang is that it has obvious advantages in plant extracts, which can be used as additives and raw materials for premixes.”

“Experiments have shown that the quality advantage of premixes is extremely obvious after using Quanwang’s plant extracts as raw materials.”

"This is a point that must be repeatedly emphasized to the acquired party in every M&A process..."

Kerston assigned tasks to each team. It can be seen that he was more determined to win than the Omni-King and did not take potential opponents seriously at all.

On the one hand, it is based on his understanding of Golden Harvest.

In terms of financial status, Golden Harvest has very low debt and sufficient cash flow, and Avic Investment Bank is also happy to provide loans to such high-quality customers.

This is important, as the acquisition offer is a very important factor in the scoring.

In addition, Jiahe has no premix business in the world, which is a blank and has no business conflict with Provimi.

Instead, it provides the highest quality raw materials and feed additives.

Moreover, they were cunning enough to contact Provimi two years in advance.

In just two years, Quanwang's additives have conquered Provimi's branches and R&D departments.

On the other hand, based on his understanding of potential competitors.

Although the main revenue of the two major groups, Taico and DSM, comes from concentrates and compound feeds, they are also very competitive in animal nutrition and premix businesses.

Also in the Netherlands.

There are too many areas of business overlap, and once the acquisition is completed, an oligopoly may emerge, and layoffs are inevitable.

Taigao and DSM can't even pass the hurdle of management and shareholders.

As for Cargill, it is just a cautious old man, and financing is its biggest weakness.

Moreover, in recent years, the domestic food trade in the United States has suffered a severe blow, with both revenue and profits declining. The acquisition of Provimi is also a manifestation of its pursuit of new opportunities.

At the same time, there is also a small overlap of business, but the impact is not significant.

However, in terms of acquisition investment, decision-making response speed, and product complementarity, it is definitely no match for Golden Harvest.

Looking around, Kerston couldn't find an opponent.

While others are still preparing to bid, he is already studying the financial, tax, legal and other issues after approval.

I think Jiahe will have to take out a loan this time!
The last time Tianhe acquired Dow Brazil, it directly paid US$10 billion in cash, which simply blinded Avic's eyes.

You treat investment banks as waiters, right?

In fact, investment banks are the core team in mergers and acquisitions, playing a role in the strategy, analysis and organization of the entire merger and acquisition.

Investment banks are indispensable for cross-border mergers and acquisitions.

But in addition to service fees, arranging financing for enterprises is also an important part of making profits.

But Tianhe has a criminal record, which makes Kerston a little worried. When the meeting was about to end, he looked at Guo Yang, who had not spoken.

"Mr. Guo, this acquisition of Jiahe will require financing and loans, right?!"

Guo Yang listened carefully to the entire meeting. When he was still digesting what he had just learned, he suddenly heard Kerston's question.

At this time, happy laughter also rang out in the conference room.

Guo Yang waved his hand and said with a wry smile: "Kerston, we haven't bid yet!"

(End of this chapter)