I Am the Third-Generation Heir of a Conglomerate - Chapter 478



Only Noblemtl

478. Large-scale disaster (3)

Sale and lease agreement for Russian factory.

It was a contract in which many Japanese companies, not just Toyota, participated, one of which was Toshiba.

Toshiba was a company that was called a symbol of Japanese technological prowess.

It was pushed aside by the flow of the times due to a series of bad news, and was even in a cash liquidity crisis.

And the companies that had been acquired and merged at huge costs in the early 2000s were also in very bad shape, so their granaries were empty and they were just piling up debt.

So I had no choice but to be the first to reach out.

I was happy to invite Toshiba’s executives to Korea to hear their story.

“Thank you for coming all the way to Korea. This is Kim Min-jae from Taewoo Group.”

“I am Haruto Shimada, a senior managing director at Toshiba. Thank you for taking the time to respond to my sudden request.”

“Isn’t the Japanese industry a bit noisy these days? I hope it stabilizes as soon as possible.”

Actually, that wasn’t what I was going to say.

It would be safe to say that I was the culprit behind this incident.

Still, it’s not like it couldn’t have happened if Japanese companies hadn’t manipulated the data.

“Let me be honest with you. The situation is very serious right now. The reliability of Japanese products is declining, and sales are falling.”

“You must be very upset. The automobile industry is the one that caused the problem, but the electronics industry is the one that is getting hit.”

In fact, even if this incident had not happened, nothing would have changed.

The Japanese electronics industry continued to decline, and it was just one more excuse.

But he didn’t say anything like that and just agreed with what Director Haruto said.

“So I have a favor to ask. I would like to cancel the contract to purchase the Russian factory that Toshiba had been trying to buy.”

“Why would you do that? It’s not like you need to spend money right now to buy a Russian factory. And you can even get monthly rent.”

“Right now, I want to reduce the possibility of becoming in debt even a little.”

“Is Westinghouse’s debt really that serious?”

Toshiba was now on the verge of delisting.

The biggest reason was Westinghouse, a nuclear power company acquired in the early 2000s.

Although Westinghouse was ambitiously acquired for over 6 trillion won, it was suffering losses greater than the acquisition price.

“I don’t know if it’s right to say this to the chairman, but Westinghouse’s loss last year alone amounted to 700 billion yen.”

“I heard that they filed for bankruptcy protection in the United States.”

“If it weren’t for the incident in 2011, this company wouldn’t be like this.”

It was Managing Director Haruto who spoke with a sense of injustice.

Who would have predicted that a major earthquake would occur in 2011?

Although they ambitiously acquired a nuclear power company, many countries, including Japan, were avoiding nuclear power plants after the earthquake.

So, it was inevitable that deficits would pile up.

The group’s financial situation was not good, so they could not hold out any longer.

“Breaking up the contract with the Russian factory will not solve this situation.”

“I know that too. But we have reached a point where we have to do something. We have to eliminate even the smallest risks one by one to survive.”

“How is the sale of Westinghouse going?”

“There is no interest from large companies at all, and only a few private equity funds are contacting us. However, they are demanding outrageous prices, so we are having difficulty selling.”

The aversion to nuclear power plants has not yet been resolved.

Besides, who would want to take over a company that suffered a loss of 7 trillion won last year alone?

Only private equity funds that view companies as mere money-making machines were interested in them for the purpose of reselling them.

“Did you know that Taewoo Group also possesses nuclear power plant development technology?”

“I understand that Taewoo Construction possesses nuclear power plant construction technology.”

“The Taewoo Group is planning to continue to develop nuclear power technology. Right now, there is no place that wants nuclear power plants, but won’t things get better over time?”

He showed a hint of interest.

Then, Managing Director Haruto’s expression changed and he raised his voice.

“Are you interested in acquiring Westinghouse?”

“Actually, I wasn’t that interested. But I feel uneasy when I hear that a nuclear power company like Westinghouse is being sold to a private equity fund.”

“I think so too. Wouldn’t it be right for a company with nuclear power plant technology like Taewoo Construction to acquire Westinghouse?”

The reason why Director Haruto was called to Korea was Westinghouse.

Although Westinghouse is now a company that is in the red, it is a company that will be able to clear its name in just a few years.

That doesn’t mean I had any intention of buying it at a high price.

They wanted to make a profit by getting a lower price or something else for free.

“It seems like Taewoo Group can help with Toshiba’s cash flow problems.”

“If it’s the Westinghouse acquisition, I’ll go back to Japan today and come up with a deal.”

“But will Westinghouse be the only one? I understand that Toshiba Memory is also being sold.”

Toshiba Memory is a symbol of Toshiba.

The semiconductor market was set to grow even larger in the future, and if it could acquire Toshiba Memory, Taewoo Semiconductor could grow even larger.

“It is not a matter that Toshiba can decide. In particular, the sale itself is difficult because the situation with the United States must also be taken into consideration.”

“We at Taewoo Group will take care of that problem for you.”

“What do you mean?”

“If we form an alliance with an American company and acquire Toshiba Memory, there will be no problem at all. We will form an alliance between the US and Korea to acquire Toshiba Memory.”

The semiconductor market was absolutely under the influence of the United States.

That’s why Toshiba was in a situation where it couldn’t sell its memory business even if it wanted to.

But if we had formed an alliance with American companies, we could have solved that problem right away.

“Are you able to acquire Toshiba Memory and Westinghouse?”

“I understand that Toshiba Memory’s market value is approximately 2 trillion yen, and Westinghouse’s value is approximately 500 billion yen. Is there anything wrong with that?”

“There is a slight margin of error, but it is not that different. Can you lend us more than 2.5 trillion yen?”

2.5 trillion yen.

The amount was well over 25 trillion won.

It was clearly an astronomical sum, but Taewoo Group had more than enough money to pay it.

“If the contract is concluded, payment can be made in a lump sum on the same day.”

“I, really? I can’t solve this problem alone. I’ll go back to Japan and discuss it with all the executives and then I’ll tell you.”

“But I want to be clear about this. This deal is by no means favorable to Taewoo Group. In particular, Westinghouse will have to endure a huge deficit.”

“I am well aware of that. First of all, since this is the first negotiation proposal, internal coordination is necessary. We will discuss the details later.”

It’ll take time.

Came to cancel a Russian factory contract worth hundreds of billions of won.

It must have been very confusing to hear about the conclusion of a sales contract worth tens of trillions of won.

“Let me just say one last thing. Taewoo Group has the ability to resolve antitrust regulations in the United States, Europe, and China. And to resolve those issues, we need to prepare. So I hope you will respond as soon as possible.”

“I will bring forward my flight time and go to Japan right now. I will contact you by tomorrow morning at the latest.”

Managing Director Haruto quickly got up from his seat.

I drove to the airport, practically running.

Vice President Han, who had no idea why Managing Director Haruto was moving so hastily, misunderstood just by looking at his back.

“Did you threaten me or something? I don’t think anyone being chased by a murderer could run that fast.”

“It wasn’t a threat, it was a very good offer. I proposed the acquisition of Toshiba Memory and Westinghouse.”

“Did I mishear you?”

“You heard me correctly.”

“Did you really make a takeover offer worth tens of trillions of won? I don’t think you would say that so casually even if you bought a 500 won piece of candy.”

It was a vice president who raised his voice slightly.

It was only natural that my voice would be raised when I made the decision on a contract worth over 25 trillion won without any discussion.

“If we acquire Toshiba Memory, it will be a great help to Taewoo Semiconductor. In particular, it is a very good opportunity for us to reverse the NAND flash market share currently dominated by Samjin Electronics.”

“There is nothing wrong with an acquisition, but there is no need to acquire it at a high price.”

“Who else but us can acquire Toshiba Memory now? Samjin Electronics can never participate in the acquisition due to antitrust regulations.”

It was Samjin Electronics that controlled 35% of the NAND flash market.

However, if Toshiba Memory is acquired as well, the stake will easily exceed 50%.

However, in the case of Taewoo Semiconductor, since it had a 15% market share, even if it acquired Toshiba Memory, it would only be able to have a slightly higher market share than Samjin Electronics.

“We too could be subject to antitrust regulations.”

“If Taewoo Semiconductor were to move on its own, that would be the case, but if it acquires shares jointly with a fintech bank, it can avoid antitrust regulations.”

“Then, will we each bear half of the acquisition cost?”

“Yes. So, Taewoo Group only needs to invest about 13 trillion won.”

Only then did Vice Chairman Han’s expression soften.

Although the fintech bank was practically my own, it appeared to be an independent bank.

This response came about because even Vice Chairman Han does not view the fintech bank as a subsidiary of Taewoo Group.

“I don’t think Toshiba Memory will be a big problem. But I just don’t understand the Westinghouse acquisition. Taewoo Construction’s nuclear power plant division is also showing a large deficit, so if they acquire a new nuclear power plant company, the deficit will only increase.”

“We may be in the red right now, but it will be resolved over time.”

“Even in Korea, we are not able to build new nuclear power plants right now. And Germany is also pursuing a nuclear phase-out policy. It is unlikely that nuclear power plants will be revived even after time passes.”

Since the Japanese earthquake, the reliability of nuclear power plants has plummeted.

There was a strong aversion to nuclear power plants in Germany, Korea, and even the United States.

So, Westinghouse was also seeing huge deficits.

“Nowadays, the value of nuclear power plants has fallen significantly because safety is prioritized over economic feasibility.”

“Do you think there will ever be a day when economic efficiency takes precedence again?”

“When a large-scale incident like war breaks out, economic feasibility is ultimately considered.”

“Are you thinking about Russia?”

“The moment Russia goes to war, the price of natural gas and oil will skyrocket. So if we prepare well now, the value of Westinghouse will increase at least twice.”

Nowadays, eco-friendly energy is in the spotlight.

But if energy prices skyrocket due to war, green energy alone cannot overcome the energy crisis.

So it was clear that the era of nuclear power would come again.

It was also a golden opportunity for Taewoo Construction, which possesses the original technology for nuclear power plants, to dominate the global market.

“I understand what the Chairman means, but the deficit is too large for Taewoo Construction to handle.”

“So, for now, we need to manage Westinghouse at the headquarters level. It won’t be too late to proceed with the merger later. Do you really think that Taewoo Group won’t be able to handle it?”

“Absolutely not. I can handle it.”

“If Westinghouse’s technological prowess is added to Taewoo Construction’s original technology, Taewoo Group will be able to dominate the nuclear power plant market.”

One vice president bit his lips hard.

It seemed that Toshiba Memory thought that it needed to make more money to acquire Westinghouse.