As the founder of China's private automobile company, not many people have seen the "tough guy" Li Shufu cry.
According to the 2021 financial report data released some time ago, Geely achieved a total revenue of 101.6 billion yuan in 2021, an increase of 10.3% year-on-year, a record high. Vehicle sales reached 1.328 million units, winning the first sales volume of domestic self-owned brand passenger cars for five consecutive years.
And to talk about how Geely has achieved the foundation and confidence of today's dazzling achievements, it goes back to the "acquisition war of the century" in 2010.
First, the acquisition was successful, and the "tough guy" Li Shufu burst into tears
On March 28, 2010, at 14:00 local time in Sweden, it was a moment that went down in history!
Li Shufu, chairman of Geely Group, solemnly and forcefully signed his name on the contract for the wholly-owned acquisition of Volvo Cars, completing the first successful case marking the acquisition of multinational brands by Chinese private enterprises, and can also be said to be the most successful cross-border acquisition by Chinese enterprises so far.
In this century cross-border M&A case, there are more than 400 professionals from global investment banks, law firms, accounting firms, financial public relations and other aspects to serve this M&A transaction. It also makes it one of the most complex outbound M&A transactions in China's history.
Half a meter high pile of contract documents, Geely Chairman Li Shufu, with the cooperation of his assistant, handed one to sign one, and it took more than half an hour to sign this "century contract". Back in the office, Li Shufu lay on the desk, motionless, and the staff next to him could not bear to disturb him, knowing what he had done for today and the unimaginable pressure he was under for it.
It wasn't until he needed to connect a meeting for a domestic company that he was reminded that when Li Shufu slowly raised his head, people found that tears were sliding down his cheeks...
II. Geely's "Pre-War Mobilization"
Just 3 days before the signing of the contract, Geely held a temporary special board meeting, unlike the previous meeting before the talk and laughter, Li Shufu had a dignified face and fell into contemplation. The secretary brewed a cup of yunwu tea that Li Shufu loved to drink, but it did not make Li Shufu calm.
This meeting is to make the final decision on whether to buy Volvo. The atmosphere at the scene was silent for a long time, and Li Shufu finally opened his mouth and spoke out the following internal speech, which has been little known for more than a decade. Li Shufu said: "At this time, the acquisition arrow is on the string, if you withdraw from the acquisition, the society must think that we are speculation, gimmicks, will cause great harm to the Geely brand; if you choose to acquire, Li Shufu himself may be ruined due to the failure of the acquisition, and can only go home to farm." ”
Unlike in public, Li Shufu always gives us the impression of being full of confidence, and the smile on his face reveals the image of a strong and humble "tough guy". At this moment, Li Shufu showed that he seemed to be facing a battle of backwaters, and if he did not succeed, he would become a hero with shortness of breath.
Now we comment on the acquisition war at that time from the perspective of "hindsight", which can be described as quite successful. But if we were in 2009 when we needed to choose between Li Shufu and Li Shufu, it was understandable that not only Li Shufu, but also the whole team did not have confidence. Because at that time, whether it was from the size of the enterprise, technical patents, capital strength, or brand influence, Geely and Volvo were not at all an order of magnitude.
1. From the perspective of sales data:
In 2007, Volvo sold 460,000 vehicles a year, compared with 210,000 geely in the same year, less than 50% of Volvo's sales.
2. From the technical level:
During the 10 years that major shareholder Ford Motors controlled Volvo, Ford invested tens of billions of dollars in research and development to make Volvo Cars world-class in engine technology, safety, and energy saving and low carbon. At that time, Geely was only a dark horse in the domestic car companies.
3. From the perspective of capital strength:
In 2009, Geely's total assets were less than 3 billion yuan, while Volvo's acquisition price at that time was 24.3 billion yuan.
From the brand point of view, "Volvo" is world-renowned, the brand value can not keep up, and there is no acquisition of capital strength, therefore, Li Shufu at the beginning of the intention to acquire Volvo, the whole market did not approve. Even Li Shufu's friends Ma Yun and Liu Chuanzhi advised Li Shufu when he heard that he wanted to buy Volvo: "That's not what you should think, that's what FAW and SAIC should think." To put it bluntly, this is a fantasy that a poor guy wants to marry a rich lady, and the toad wants to eat swan meat.
So, in the end, how did Li Shufu realize his "acquisition dream" for Volvo?
Third, the joining of the Rothschild family
In fact, in January 2007 and January 2008, Reclair, then CFO of Ford Motor, twice rejected Shufu Lee's offer. However, a key figure appeared at the right time to change the direction of this takeover war.
In 2008, Liping Yu, President of Greater China of Lohir Financial Group in France, appeared in Geely's "Volvo Acquisition" team. The interest group represented by Yu Liping is the Rothschild family that is calling for rain in the financial market in the book "Currency War".
In fact, at that time, in addition to Geely, there were many giants who had intentions to acquire Volvo, such as a European car company 10 times the size of Geely, which also found the Rothschild Group, which also made an offer to buy Volvo. When the Rothschild headquarters in the United Kingdom learned that Yu Liping wanted to support an obscure Chinese company to buy Volvo, it was greatly questioned. In their words, why would the Rothschild family, with a background of more than 200 years, support a mediocre Geely?
In June 2008, Yu Liping delivered a speech at the Rothschild Global Partners Conference, discussing the importance of Emerging Markets such as China to Rothschild and Geely's acquisition of Volvo as one thing, Yu Liping said passionately: "If Geely's acquisition of Volvo is successful, it will have a global representative significance, and it can become a Rothschild project rooted in the Chinese market!" ”
Finally, Yu Liping's confidence touched the Rothschild headquarters in London, and the internal project was approved. A super-luxurious M&A team was subsequently formed, with four core figures: Yu Liping, former Volvo Group Executive Chairman Pelle Gillinghammer, former Volvo CEO Hans Orof Olson and former Goldman Sachs Partner Merrick Cox.
At this point, Geely's acquisition of Volvo has become a key and incomparably important battle that Li Shufu and Yu Liping regard as each as critical and extremely important in their lives.
Fourth, the final obstacle
As the saying goes, self-helpers help! In October 2018, Ford saw an important personnel change that also played a key role in the merger: Volvo CFO Recler, who had twice rejected Geely's acquisition, retired and Ford Motor Co. Lewis Booth, head of Europe and Chairman of Volvo, took over as Ford's CFO. In December 2008, Ford, hit by the U.S. subprime mortgage crisis, prepared to sell Volvo in exchange for cash flow. In January 2019, Ford CEO Mulari told Li Shufu that once the acquisition process was initiated, Geely would be notified as soon as possible.
In China, the good news has also come one after another, after Li Shufu submitted the first round of bidding for the acquisition of Volvo, he received strong support from the national ministries and commissions, and got the exclusive support letter from the National Development and Reform Commission, which means that there will be no second company in China to participate in the acquisition, and the rest of the matter is to raise funds.
Yu Liping personally led the M&A team, divided into two ways, looking for funds. However, until the end of December 2009, the day Geely announced that it had signed a formal agreement with Ford, the M&A funds were not all in place. Because at that time, both public opinion and capital seemed to be not optimistic about this "snake swallowing elephant" acquisition. Because Geely could not come up with a clear financing structure in time, Ford also began to be anxious, constantly urging Geely to give pressure.
In the end, Daqing State-owned Assets and Jiading State-owned Assets invested a total of 4 billion yuan to support Geely. At this point, there were only 26 days left before the final date for Which Ford declared it would "not wait any longer." At 14:00 on March 28, 2010, Swedish time, Geely and Ford completed the acquisition handover contract at volvo headquarters in Sweden as scheduled.
5. Conclusion
During the entire acquisition of Volvo, Geely not only formed a professional international team in strict accordance with international guidelines, but also respected the corporate culture and emotional demands of the acquired Party Volvo, and did not play a strong role as a "savior", which is also an important reason why Volvo finally chose Geely among many acquirers. The acquisition of Volvo has enabled Geely to become a world-class brand and technical strength.
From the proposal of the merger in 2002 to the final completion in 2010, Geely's acquisition of Volvo took seven years. In this Geely", we see Li Shufu's unswerving execution and the iron man tenderness of dream realization.
As the first private car in China, Li Shufu deserves it.