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Extraordinary Genius
Chapter 1306 – Busch’s Representative
Feng Yu’s men will do all the work after giving out the orders, and Schneider had informed Budweiser’s headquarters about Feng Yu’s conditions.
As Feng Yu expected, his name is worth a lot.
If Feng Yu owns Budweiser’s shares, the share prices will surely shoot up. Also, Feng Yu can help Budweiser increase its market share in China quickly and help them become the no.1 foreign beer in China.
Currently, the top beer in China is Snow. It is a joint venture between CR Snow and South African Breweries. Both companies have invested over 12 billion HKD over the years, and South African Breweries owns 49% of the company.
CR Snow has to share almost half of the profits with South African Breweries. South African Breweries had just merged with US’s Miller Brewing Company to form SABM. They quickly become the world’s second-biggest brewery.
China’s beer industry is taken over by joint venture companies and foreign companies, except for Qingdao Beer and Beijing Beer. Carlsberg, Heineken, and other breweries set up multiple factories in China and slowly increase their joint venture companies’ shares. In the end, they become the controlling shareholder.
The Chinese government had supported Qingdao and Beijing Beer. Although foreign investors managed to become shareholders, they do not own any voting shares. The major shareholder is still State-owned Assets Supervision and Administration.
SABM is a threat to Budweiser’s status in North America now. This company had increased its market share to more than 205. Of course, Budweiser is still the market leader in North America, with almost 50% of the market share.
But it is the opposite in China. Snow is expanding like crazy, and if Budweiser does nothing, they will lose the vast Chinese market forever. Heineken and Carlsberg have already started their moves in China, and they are Budweiser’s strongest competitors.
Being the world’s no. 1 beer brand has given Budweiser a significant advantage. The impact will be great if they lose this title.
Feng Yu’s conditions are not harsh, as he only wanted 10% of the shares and a director position. These are not an issue.
On the third day, Schneider appeared in front of Feng Yu with two Caucasians.
“Mr. Feng. This is our Budweiser’s President and CEO, Mar Andorf. This is one of the directors, Johnson Schmitz, from our parent company, Anheuser-Busch. They are representing Budweiser to discuss our cooperation.”
Schneider looks slightly disappointed as the company had sent two high-level executives to replace him in this negotiation. He thought he could get a promotion if he can complete the deal.
“Nice to meet you, Mr. Feng.”
“Nice to meet you all too. Have a sit.” Feng Yu nodded as greetings and did not shake their hands.
Those two had not extended their hands for a handshake, and Feng Yu will not lower his status to offer a handshake.
Feng Yu has never heard of these two men in his previous life, which means they are nobodies. Maybe they have some assets, but they are nothing compared to him. He even thinks that Kameda Masao is doing better than them.
Andorf and Schmitz exchanged looks. The World’s Richest Man is not easy to get along with, and he did not even stand to receive them.
“Mr. Feng. We will not beat around the bush. Our Anheuser-Busch welcomes you to invest in Budweiser. It will be our honor to cooperate with you.”
Feng Yu nodded. All these pleasantries are not important. What’s important is the conditions.
Schmitz maintained his facial expression despite Feng Yu’s attitude. “Mr. Feng, Budweiser’s current market value is around 12 billion USD, and Bing City Beer’s market value is less than 400 million USD. We will be swapping 10% of our shares, including voting shares. You will pay the difference with cash, right?”
“I believe you understand that acquiring another company’s shares, the price will be slightly higher. Budweiser is currently doing well, and we will not accept the price based on the current market rate.” Andorf added.
“So?”
Feng Yu knew they would not agree to swap shares based on the current market rate. The shareholders will not get their dividends if they sell the shares, and they will want to get some returns if they are selling.
“We are not asking for a lot. 120 million USD, 10% of Bing City Beer shares, including voting shares, and a director position. We will offer 10% off Budweiser’s shares, including voting shares and a director position.”
This is a reason the price is less than a 4% increase from the market rate. But Feng Yu is not satisfied. He is more concerned about other conditions like sales channels, brewing techniques, etc.
“How are we going to split the sales, and what about our cooperation in other areas?” Feng Yu asked.
Schmitz knew Feng Yu could accept the prices he mentioned.
Their Board of Directors had discussed this pricing for two days.
Once they reveal the news of this cooperation, Budweiser’s share prices will sure shoot up. They also considered releasing the news now, and Feng Yu will have to pay more for the 10% shares.
But if they do that, this cooperation will fail, and it will severely affect Budweiser’s shares. They are also worried Bing City Beer will cooperate with Heineken, Carlsberg, or Snow, as it will stop Budweiser’s development in China.
“We have the strongest sales channels in North America and have lots of sales channels in Europe. We can share it with Bing City Beer. However, Bing City Beer’s sales channel in China is average. But one of your subsidiaries, Beverage Alliance, has the best distribution channel in China. We want you all to share it with us.”
“We can also sign an OEM contract to produce each other’s beer to lower our production and transportation cost,” Andorf replied.
“Since you all want our Beverage Alliance’s sales channel, then you all must also share your sales channels with Beverage Alliance. Also, we need new recipes. I hope this cooperation will not be limited to production and sales. We should also look into developing new beers together.” Feng Yu said.
Schmitz did not expect Feng Yu to ask for recipes. Budweiser’s recipe is confidential and must not be shared with others. Feng Yu is too greedy!
Translator’s notes:
Snow (beer)
https://en.wikipedia.org/wiki/Snow_(beer)
CR Snow
https://en.wikipedia.org/wiki/CR_Snow
South African Breweries
https://en.wikipedia.org/wiki/South_African_Breweries
Miller Brewing Company