37: Chapter 37 Acquisition Strategy

The news of Park Chan-hyeok raising 10 billion was like a thorn in Chairman Wang Shunyi's side. It didn't hurt, but it was irritating. He couldn't sleep well these past few days, tossing and turning in the middle of the night—if that money really reached Park Chan-hyeok's hands, how long could Shunyi Foods' slight advantage last?

On Wednesday morning, he called Zhang Junhao, Park Min-ji, and Li Dongxu into the small conference room. The door was closed, the blinds were drawn, and the four sat around the small round table, none of them touching the coffee in front of them.

"You all know the situation." Chairman Wang Shunyi spread the report Li Dongxu had compiled on the table. "Park Chan-hyeok wants money, 10 billion. What will he do when he gets it? Price wars, snatching up channels, poaching suppliers. Can we hold up against that?"

No one spoke. Zhang Junhao picked up his coffee cup and set it back down.

"We can't hold up." Chairman Wang Shunyi answered for them. "So we can't wait for him to make a move. We have to move first."

"How do we move?" Park Min-ji asked.

"I mentioned acquiring Park Chan-hyeok's company before, but that was too ambitious; we can't do that now." Chairman Wang Shunyi opened his notebook and pointed to the middle page. "But I checked Li Dongxu's report. Among Park Chan-hyeok's suppliers, there is one called Gyeongnam Ingredients that specializes in seasoning packets and dehydrated vegetables. This company accounts for more than half of Park Chan-hyeok's raw material procurement. If we can take over this supplier—"

"It would be like cutting off Park Chan-hyeok's throat." Zhang Junhao added, his eyes brightening.

"Exactly. Without raw materials, his production lines will have to stop. Besides, the owner of Gyeongnam Ingredients, Choi Jae-hoon, is fifty-five this year. I heard he wants to retire, but his children refuse to take over, so the company has been on the market for a while." Chairman Wang Shunyi looked at Li Dongxu. "Li Dongxu, how is the investigation on your end?"

Li Dongxu opened his notebook. "Gyeongnam Ingredients, Gyeongsangnam-do, eighty employees, annual sales of about 20 billion. The main client is Park Chan-hyeok Foods, plus a few small and medium-sized food companies. The owner, Choi Jae-hoon, has been in this business for thirty years and has indeed been looking for a buyer recently. He talked to two companies before; one offered too little, and the other required him to keep the management team and continue working, which he didn't want. He wants to retire completely, but he's worried about his old employees."

"What's his asking price?" Zhang Junhao asked.

"Between 15 billion and 20 billion. If we want to secure it, offering around 18 billion should give us a chance."

18 billion. The conference room fell silent for a moment. This number was several times larger than the 2.5 billion invested by Shinhan Investment last year. Chairman Wang Shunyi tapped his fingers on the table lightly.

"I'll figure out the money. Minji, how is the progress with government support funds?"

Park Min-ji pulled out a document. "The export enterprise support loan is 2 billion; the materials have been submitted, and the approval cycle is about a month. The food industry upgrade subsidy is 500 million, also in the process. The youth entrepreneurship fund is 300 million; this is the fastest and can come down within two weeks."

"That adds up to 2.8 billion. We are still 15 billion short." Chairman Wang Shunyi calculated. "The rest will come from the bank. Minji, contact Kookmin Bank, where we have our account, and see how much we can borrow."

"Okay."

"Jun-ho, prepare the legal documents for the acquisition. Li Dongxu, continue to dig deeper into the situation at Gyeongnam Ingredients—Choi Jae-hoon's personality, his employees, and the specific terms of his cooperation with Park Chan-hyeok. The more detailed, the better."

The three of them took their tasks and the meeting dispersed.

Two days later, Li Dongxu brought another supplementary report. This time it wasn't cold numbers, but the person, Choi Jae-hoon—a native of Gyeongsangnam-do, he entered a food factory right after graduating from high school, started as a laborer, and opened his own company at forty-five. He is kind-hearted and treats his employees well, but has a stubborn temper; once he makes up his mind, it's not easy to change. He has worked with Park Chan-hyeok for six years; the relationship is not bad, but not close. Park Chan-hyeok often suppresses prices and delays payments, which Choi Jae-hoon doesn't say anything about, but feels uncomfortable about.

After reading the report, Chairman Wang Shunyi felt more confident.

On Friday, he had Li Dongxu arrange a meeting with Choi Jae-hoon. The location wasn't in Seoul, but at a traditional Korean restaurant in Gyeongsangnam-do. Chairman Wang Shunyi arrived half an hour early, booked a private room, and ordered a few home-style dishes—soybean paste stew, grilled mackerel, spicy stir-fried pork belly, and a dish of kimchi. It wasn't a fancy place, but it was clean and had the solid feel of an old shop.

Choi Jae-hoon arrived ten minutes after the agreed time. A fifty-five-year-old man, his hair was mostly gray, wearing a dark gray jacket, and his leather shoes were polished very brightly, though the toes were a bit worn. He scanned the room as he entered, and seeing only Chairman Wang Shunyi, he was slightly stunned.

"Chairman Choi, hello. I am Chairman Wang Shunyi of Shunyi Foods." Chairman Wang Shunyi stood up and bowed.

"Oh, President Wang. I've heard much about you." Choi Jae-hoon reached out, shook his hand, and sat down opposite him. The waiter brought the soybean paste stew, steaming hot. He picked up a spoon and took a sip, saying nothing.

Chairman Wang Shunyi wasn't in a hurry either, picking up a piece of pork belly and chewing slowly. The two ate quietly for a few minutes.

"President Wang, you came all the way from Seoul, surely not just to treat me to a meal?" Choi Jae-hoon put down his spoon and leaned back in his chair.

Chairman Wang Shunyi put down his chopsticks and looked into his eyes. "Chairman Choi, I heard you want to retire."

Choi Jae-hoon didn't deny it, nor did he admit it, picking up his teacup and taking a sip.

"Gyeongnam Ingredients was built by your own hands; thirty years is not easy." Chairman Wang Shunyi said, "You want to find a reliable buyer and hand the company over to someone you trust. The two companies I heard you talked to before—one offered a low price, the other wanted you to keep managing—you were unsatisfied with both. Because you are afraid that after you retire, those old employees who have followed you for more than ten years will be laid off."

The corners of Choi Jae-hoon's mouth twitched. "You investigated me?"

"In business, you have to understand your partners." Chairman Wang Shunyi's tone did not back down. "But I didn't come today to pry into your secrets. I came to discuss a partnership."

"What kind of partnership?"

"Shunyi Foods acquires Gyeongnam Ingredients. 18 billion. You retain 10% of the shares and act as a consultant. The company maintains independent operations, not a single existing employee will be laid off, and the management team remains unchanged. The only requirement—Gyeongnam Ingredients gives priority to guaranteeing the raw material supply for Shunyi Foods."

Choi Jae-hoon stared at him for a few seconds, his fingers slowly turning around the edge of the teacup. "Do you know that Park Chan-hyeok is my biggest client? If I am acquired by you, he will definitely change suppliers. That 40% of sales will be gone."

"Chairman Choi, how much profit has that 40% from Park Chan-hyeok brought you?" Chairman Wang Shunyi's voice was not loud, but very direct. "He suppresses prices, delays payments, and changes orders at the last minute; you have endured this for six years. Gyeongnam Ingredients' profit margin has been falling since he became a major client. Am I right?"

Choi Jae-hoon didn't speak. Silence was acquiescence.

"I don't need you to agree immediately." Chairman Wang Shunyi stood up, took out a simple letter of intent from his bag, and placed it on the table. "This is my preliminary plan. Go back, look at it, and discuss it with your family. If you feel there is sincerity, we will talk further."

He bowed, picked up his coat, and walked out of the room. When he reached the door, he heard Choi Jae-hoon's voice behind him: "President Wang, how old are you?"

"Twenty-eight."

"Twenty-eight years old, quite an appetite."

Chairman Wang Shunyi looked back at him, smiled, opened the door, and left.

It was already night when he returned to Seoul. Park Min-ji was waiting for him at the company, with a thick stack of bank loan application materials spread out on the table. She looked up when she saw him enter: "How was it?"

"He didn't agree, but he didn't refuse either. There's a chance." Chairman Wang Shunyi took off his coat and threw it on the sofa, sat down next to her, and picked up the stack of materials to flip through. "What about the banks?"

"Kookmin Bank said they can lend 8 billion at 4% interest for a three-year term. Shinhan Bank has also been contacted, but they have some doubts about our strategy of acquiring suppliers and won't approve it until they see a detailed business plan."

"8 billion is not enough. Find another one and scrape together over 12 billion."

"Then how much will your equity be diluted?" Park Min-ji looked at him.

"Let it be diluted. If we don't take over Gyeongnam Ingredients, by the time Park Chan-hyeok gets his 10 billion, we won't even have the chance to be diluted."

Park Min-ji didn't say anything more and lowered her head to continue filling out the forms. The office quieted down, with only the rustling sound of pen tips on paper. Chairman Wang Shunyi leaned back on the sofa, watching her profile. The light made her outline very soft, her eyelashes fluttering slightly, like a butterfly flapping its wings.

"Minji."

"Hmm?"

"Thank you for your hard work."

She looked up and smiled at him. "You too."

Seoul outside the window was already dark, and Namsan Tower in the distance was shining. He reached out and held her hand; her hand was a little cool, but she didn't pull it back. The two sat quietly like this, neither speaking. The sound of traffic outside came from afar, like waves, lapping against the night of this city, one after another.