Chapter 624 The mantis catches the cicada, the oriole is behind.
The internal financial information on the desk clearly lists the analysis report on the acquisition of Rio Tinto, the world's third largest mining giant, by BHP Billiton, the world's second largest miner;
In view of the repeated disruptions of the British Red River Resources Company, the "long-term agreement" price of iron ore in 2008 finally rose by 17.5%, which was much lower than the original historical increase of 42%.
Correspondingly, the three major mines lost nearly 20 billion US dollars in profits.
Australia's BHP Billiton learned from the experience and proposed a US$145 billion merger with Britain's Rio Tinto at the end of 2007.
It is proposed to exchange 3 BHP shares for 1 Rio Tinto share. This offer represents a 21% premium to Rio Tinto's share price of 43.50 pounds.
In terms of stock market value, the above-mentioned overall acquisition price is approximately US$145 billion.
Regarding this offer, Rio Tinto said that after "careful consideration", the company's board of directors concluded that:
This bid significantly underestimated Rio Tinto's value and prospects and was therefore rejected.
The international financial community generally believes that although BHP Billiton's acquisition proposal has been rejected, this is just the beginning. There may be a protracted war later, and the possibility of launching a hostile takeover cannot be ruled out when necessary.
If this cross-century merger is successfully completed, BHP Billiton will have stronger bargaining power and resource concentration in the world's bulk resources field.
If the two companies merge, it will create the world's largest iron ore, copper, and aluminum producer, which will account for more than one-third of the global iron ore market.
In addition, this new energy giant will also occupy an important position in the natural gas, coal, zinc, and diamond industries, and own mines and oil fields on six continents in the world.
On the same day that Rio Tinto rejected BHP Billiton's takeover, Rio Tinto Canada Holdings increased its stake in Alcan, bringing its total shareholding to 95.82%, close to 100% absolute control.
According to analysis by the Hong Kong Guanfengyun Economic Research Center;
This move shows Rio Tinto's strong willingness to resist and increase its stake in Rio Tinto Alcan. This is a completely defensive posture. The merger is destined to have twists and turns.
Because this ultra-large-scale merger involves market monopoly, it needs to be approved by the antitrust authorities of China, the United States, Japan, South Korea and Europe and given the green light.
Faced with the aggressive offensive from BHP Billiton, Rio Tinto teamed up with Chinalco. In early 2008, Chinalco spent US$14 billion to acquire 9% of Rio Tinto's shares, injecting valuable cash flow into the heavily indebted Rio Tinto.
The world's financial situation is turbulent. Wang Yaocheng is sitting on the Victoria Peak in Hong Kong and watching with cold eyes, watching these heavyweight contestants singing and singing, constantly performing bizarre and bizarre scenes.
Wang Yaocheng knew;
All this is false. No matter whether it is Australia's BHP Billiton or Chinalco, the final idea is impossible to succeed. The one who has the last laugh is the board of directors of Rio Tinto.
They used Chinalco to resist BHP Billiton. When the financial crisis passed and the company's finances improved, Rio Tinto's board of directors immediately got rid of Chinalco as a partner, leaving it in vain.
Chinalco’s biggest mistake;
It was when the financial crisis was at its strongest that we failed to capture Rio Tinto in one fell swoop and missed a great opportunity.
Mergers and acquisitions in the international market do not tolerate the slightest warmth, nor do they tolerate the modest and gentlemanly style of not taking advantage of others' dangers. Only those who can get it in their hands quickly, accurately and ruthlessly are their own.
When it comes to playing market tricks, Rio Tinto is the veteran.
Now...it's just two words.
As the saying goes, when the mantis stalks the cicada, the oriole stalks behind.
Wang's consortium is now a civet cat hiding in the dark, waiting for the oriole to show up in a gorgeous way to obtain maximum benefits.
Isn’t it a waste of time for the consortium to accumulate so much cash in its cash pool that it doesn’t need to engage in large-scale corporate mergers and acquisitions?
Since Wang Yaocheng is determined to enter the world's bulk resources field, he will not be willing to play a small role and can only play drums from the side. He wants to be the person at the center of the world stage.
A single word is spoken, commanding the wind and clouds.
Judging from Rio Tinto's current profitability, the annual rate of return can reach a high level of 22.5%. This is of course an unsustainable situation and stems from the three major mines tacitly pushing up prices.
Judging from normal years, Rio Tinto's annual rate of return has been between 6.7% and 9% for a long time. This investment rate of return is already very good for very large-scale funds.
The Wang consortium will decisively take down Rio Tinto as its prey when the time comes.
By then, Red River Resources will own Rio Tinto, the world's third-ranked mining company, FMG Resources, the fourth-ranked company, and Simandou Iron Mine, which ranks sixth in terms of production capacity. Its overall iron ore supply capacity will exceed that of Vale.
Ranked first in the world.
It will also own the world's top bauxite, copper ore and natural gas resources, becoming a resource tycoon with substantial say in the field of bulk resources, adding a solid wealth map to the consortium.
Why is Royal Family Fund so sure of winning in the end?
It all stems from Rio Tinto's large-scale external mergers and acquisitions, which consume too much cash flow and are burdened with debts of up to 66.7 billion U.S. dollars. This is simply not feasible for Rio Tinto, which can earn more than 20 billion U.S. dollars in profits every year.
Calculate it.
The problem is that everything is magnified during the financial crisis. All lending institutions are calling for loans. Rio Tinto has already felt the coming financial crisis, so it chose to form an alliance with Chinalco.
BHP Billiton has seen this, Chinalco may have seen this, and Royal Fund has also seen this.
Different from the first two, the Royal Family Fund has abundant cash flow. It can add insult to injury when Rio Tinto is in the most difficult times, or it can provide help when needed. The specific method depends on the choice of Rio Tinto's board of directors.
In fact, Rio Tinto's board of directors didn't have much choice.
If it doesn't give in, the Royal Family Fund can step on it hard and dismantle Rio Tinto through its expired equity in the HSBC mortgage loan.
Because of Rio Tinto's US$66.7 billion debt, loans belonging to HSBC account for more than two-fifths.
In a sense, HSBC and Rio Tinto are more like brothers who support each other. HSBC is headquartered in the UK and has a close cooperative relationship with Rio Tinto for more than 100 years. The cooperation between the two parties is long-standing.
When necessary, it is okay to insert a knife in the back.
Wang Yaocheng's coveting of Rio Tinto is not just a matter of a day or two. This big game has been played for a long time, but now it has reached the closing stage.
In the shopping basket of Royal Fund, there are also many Fortune 500 companies, which are well-known multinational groups around the world.
For example, the Swiss ABB Group, the American International Group AIG, the British Rio Tinto, Telefonica and Vodafone.
Others may be shocked if they know Wang Yaocheng's ambition.
If they don't take advantage of the situation, the Wang Consortium will never be able to get its hands on these leading companies in various fields with excellent quality. This financial crisis will bring about a once-in-a-lifetime opportunity.
If you don't hold on tightly, Wang Yaocheng will regret it for the rest of his life.
Therefore, to complete all M&A goals, US$500 billion is far from enough. Wang Yaocheng can obtain bank credit of no less than US$200 billion from HSBC and other related banks to achieve the final industrial layout.
Just take American International Group as an example. It is a long-established Fortune 500 company. It ranked 18th on the list of the world's two thousand largest multinational companies released by Forbes in 2008 and is one of the constituent stocks of the Dow Jones Industrial Average.
AIG is the largest insurance company in the United States and the largest insurance company in the world by market capitalization. It has a constantly changing and innovative business philosophy and solid financial resources.
According to a prudent assessment by the Hong Kong Guan Fengyun Economic Research Center;
Most of AIG's businesses are running well, but its financial products unit in London, England, has been "overturned" by a subprime mortgage-linked bond, and the problems are quite serious.
Since entering 2008, AIG has suffered continuous net losses. In the first quarter of 2008, its cumulative losses in the credit default swap business have reached US$6.5 billion. If the situation does not improve, it may lose US$25 billion to US$30 billion in the second fiscal quarter.
, cumulative losses in other businesses also reached US$15 billion.
Since the beginning of 2008, AIG's stock price has shrunk by 42%, indicating that market participants are quite unfavorable about this situation.
AIG is unable to solve this big problem. In 2008, its annual losses may exceed US$100 billion, and it is on the verge of bankruptcy.
Without strong help, the consequences will be dire.
The relevant research reports of the Hong Kong Guanfengyun Economic Research Center are rigorous and objective. Wang Yaocheng knows that the US government has invested US$185 billion in bailout funds to save AIG, finally allowing the company to survive the crisis.
Is it worth paying such a huge price?
The answer is; very worth it.
After surviving the existential crisis, it took only four years for American International Group to pay off all the bailout funds from the U.S. government in 2012 and realize dividends to shareholders.
Although the money falling into the hands of each shareholder is not much, it still demonstrates its strong profitability.
American International Group has insurance business channels all over the world. It is the largest underwriter of industrial and commercial insurance in the world. It has always been a top insured person. It controls dozens of property insurance companies and life insurance companies, and owns the world's largest
The aircraft leasing company's annual net income exceeds US$40 billion.
It owns 5 million square meters of properties around the world, 100% equity in Dubai Port, controlling stake in London Airport, 90% equity in Belgium Telecom, 22.5% equity in Fuji Fire and Marine Insurance, 10% equity in China Property & Casualty Insurance, and a series of excellent assets.
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For such a world-class insurance company, it is not fatal to fall into the pit of the subprime mortgage crisis. Its quality is excellent, which coincides with Rio Tinto and the Swiss ABB Group.
As long as the company survives the biggest survival crisis and relies on its own foundation and error correction capabilities, it will soon be able to climb out of the quagmire and once again be full of vitality.
As the most powerful bank in the world, HSBC's insurance business and investment banking business are both weak points, and this is precisely the area in which American International Group is best at and has reached the top level in the world.
The two complement each other and will surely produce a linkage effect of one plus one greater than two, providing strong support to the consortium enterprises.
Now, just wait for the opportunity.
Precisely because he has many grand acquisition plans, Wang Yaocheng now has very little interest in Samsung, and he is not willing to waste precious cash flow. In his mind, Samsung is not a high priority.
After more than ten years of intensive crackdowns and encirclement and suppression of this company, he is no longer the high-spirited handsome boy in history, but a middle-aged greasy man with no aspirations, and his attractiveness is much less attractive.