51: Chapter 51 Acquisition Matters

By mid-December, winter had fully arrived in Seoul. The temperature had dropped to minus ten degrees Celsius. Pedestrians on the streets tucked their necks into their coat collars and quickened their pace. Chairman Wang Shunyi stood waiting in the lobby of a hotel in Gangnam District, wearing the black padded jacket he bought last year. His tie had been tied by Park Min-ji that morning, who said, 'You're meeting foreigners today, dress more formally.' He found the tie too tight and secretly loosened it a bit, earning a glare from Minji.

The representatives from Temasek and Blackstone arrived on time. The person from Temasek was the Investment Director responsible for the Korean market, surnamed Lin, a Singaporean Chinese in his early forties with meticulously combed hair, speaking English with a distinct Fujian accent. The representative from Blackstone was an American named David, tall and thin, wearing a dark blue suit with a maroon tie. His handshake was firm, like he was cracking a walnut.

Choi Jae-won acted as the intermediary, leading both parties to the hotel's private meeting room. On the conference table were several bottles of mineral water and a pot of phalaenopsis orchids, blooming vibrantly, their pink-purple petals still beaded with water droplets.

'President Wang, these are Director Lin from Temasek and Mr. David from Blackstone,' Choi Jae-won introduced, then repeated it in English.

Chairman Wang Shunyi greeted them in English, then sat down and opened the prepared PowerPoint presentation. He hadn't used any flashy templates—just black text on a white background, a few pages of charts, clear and straightforward.

'Shunyi Foods, established for one year and ten months. Last year's revenue was 350 billion won, with a net profit of 18 billion won. Market share increased from less than one percent to two percent, ranking sixteenth.' He pointed at the numbers on the screen. 'These are past achievements. Next year's goal—revenue of 500 billion won, entering the industry's top ten.'

David flipped through the documents on the table and asked, 'President Wang, you plan to acquire Jins Foods. Can you elaborate on the background and objectives?'

Chairman Wang Shunyi switched to the next PowerPoint slide. The page displayed a shareholding structure chart of Jins Foods, with red and blue colors—red for the Kim Dong-hyun family, blue for Choi Jae-won and other shareholders.

'Jins Foods was once among the top five in the industry, with a five percent market share. However, due to management decision-making errors, a price war lasted for three months, burning through 9 billion won, depleting cash flow. Coupled with a food safety crisis damaging brand reputation, the current market share is only two percent.' He used a laser pointer to indicate the red and blue chart. 'Currently, Mr. Choi Jae-won holds twenty-nine percent of Jins Foods's shares, making him the largest shareholder. Kim Dong-hyun holds thirty-two percent, now the second largest. But Kim Dong-hyun's control has been weakened; the company is effectively rudderless.'

'The acquisition will be in two steps. First, Mr. Choi will transfer his twenty-nine percent stake to Shunyi Foods. Second, we will acquire over twenty percent more shares from the market through a public tender offer, combined with negotiations to purchase part of Kim Dong-hyun's holdings, ultimately achieving absolute control.'

'How much funding is required?' David asked.

'The share transfer will cost approximately 10 billion won. The tender offer and negotiations with Kim Dong-hyun will cost around 25 billion won. Integration and brand restoration will be about 5 billion won. Total: 40 billion won.'

Director Lin and David exchanged a glance. David turned a page in his file and asked a detailed question: 'What about Jins Foods's debt situation?'

Chairman Wang Shunyi glanced at Zhang Junhao, who handed over a report. 'Jins Foods's current debt ratio is approximately sixty percent, with bank loans constituting the majority. After the acquisition is completed, we will use part of the funds to repay high-interest loans and optimize the debt structure.'

Director Lin nodded, jotting something down in his notebook. 'President Wang, we need to conduct due diligence. The financials, legal matters, and operations of both Shunyi Foods and Jins Foods—everything must be checked.'

'No problem,' Chairman Wang Shunyi said. 'We will cooperate fully.'

For the next two weeks, Shunyi Foods' office turned into a marketplace. Over a dozen people from the Temasek and Blackstone teams arrived—accountants, lawyers, industry analysts—filling the conference room to capacity. They reviewed three years of financial statements, examined every supplier contract, looked at factory production records, and even spot-checked products in the warehouse that hadn't been shipped out. Lee Chang-ho was questioned for an entire afternoon about the plant-based noodle formula, raw material sources, and production costs, until his voice grew hoarse.

Kim Tae-min was busy every day ordering lunch for these people, and countless buckets of coffee were consumed. Park Min-ji privately told Chairman Wang Shunyi, 'These people are ten times more professional than domestic Korean audit firms.' Chairman Wang Shunyi replied, 'Naturally. Look how much they charge us per year.'

On the day the due diligence concluded, Director Lin called Chairman Wang Shunyi into the conference room. His expression was calm, but the corners of his mouth were slightly upturned.

'President Wang, Temasek has decided to invest in Shunyi Foods. Twenty billion won for a fifteen percent stake. Additionally, we will provide a 10 billion won loan specifically for the acquisition of Jins Foods. The loan term is three years, with an interest rate set at the Singapore Interbank Offered Rate plus two percentage points.'

Twenty billion won for fifteen percent meant Shunyi Foods was valued at over 130 billion won. This figure was slightly lower than Chairman Wang Shunyi had anticipated, but he didn't dwell on it. Securing the funds was more important than the valuation.

'I accept,' Chairman Wang Shunyi extended his hand.

Director Lin grasped his hand and shook it firmly. 'Pleasure doing business.'

The day after the contract was signed, the funds arrived. Chairman Wang Shunyi stared at the new numbers in the bank account, sitting in his office for a long time. Park Min-ji pushed the door open and asked him what was wrong. He said, 'Nothing. Just thinking that a year ago, I was worrying over a few million won. Now, having twenty billion in the account feels like a dream.'

'It's not a dream,' Park Min-ji said. 'You earned it.'

With the funds in place, the first step of acquiring Jins Foods commenced quickly. Choi Jae-won transferred his twenty-nine percent stake to Shunyi Foods for 10 billion won. On the signing day, Choi Jae-won wore a dark gray suit with a silver tie, looking very sharp. After signing, he put down the pen, looked at Chairman Wang Shunyi, and said, 'Jins Foods was my first investment in the food industry, and also my last. I'm entrusting it to you.'

'Mr. Choi, I won't let you down.'

But the second step wasn't as smooth.

Kim Dong-hyun refused all negotiations. When Shunyi Foods' lawyers called, his secretary answered, saying, 'The Chairman is not in.' Emails went unanswered. Zhang Junhao tried to arrange a dinner meeting through an intermediary, but he said, 'No time.' Finally, Chairman Wang Shunyi personally wrote a letter, had Kim Tae-min deliver it to the front desk at Jins Foods's headquarters. The letter contained only one sentence: 'Chairman Kim, the future of Jins Foods should not be decided by emotions. Please consider the shareholders' interests.'

Kim Dong-hyun's reply arrived the next day, written on Jins Foods's official letterhead, handwritten in a scrawled script: 'I founded Jins Foods. I will not let it fall into a competitor's hands. Even if it goes bankrupt, I won't sell.'

After reading the letter, Chairman Wang Shunyi wasn't angry; instead, he smiled. He handed the letter to Zhang Junhao, who read it and cursed, 'Madman.'

'He's not a madman,' Chairman Wang Shunyi said. 'He can't bear to let go. A company he's run for over twenty years is like his own child. Who wants to sell their child to an outsider?'

'Then what do we do?'

'Tender offer. Buy from the market.'

Shunyi Foods initiated a public tender offer at a price of 600 won per share. This price was twenty percent higher than the market rate, very attractive to retail shareholders. After the announcement, Jins Foods's stock price jumped from 500 won to 580 won. Retail investors began hesitating—sell now or wait for a higher price?

Kim Dong-hyun panicked. He united with members of the Kim family and published an open letter on social media titled 'Protecting the Independence of Jins Foods.' The letter stated that Shunyi Foods' acquisition was a hostile takeover aimed at eliminating a competitor and urged shareholders not to accept the tender offer. The letter ended with Kim Dong-hyun's signature and his family seal.

But the retail investors weren't convinced. Someone commented: 'Chairman Kim, you've run the company into the ground, and now you want us to protect its independence? Is our money not money?' Another said: '600 won per share, twenty percent above market price—I'm selling. Your family can keep it as a heirloom.'

On the final day of the tender offer, Shunyi Foods had accumulated twenty percent of the circulating shares. Combined with the twenty-nine percent acquired from Choi Jae-won, Shunyi Foods now held a total of forty-nine percent of Jins Foods's shares. Kim Dong-hyun's stake was diluted from thirty-two percent to twenty-five percent, making him the second-largest shareholder.

On the afternoon the news was announced, Chairman Wang Shunyi, as the largest shareholder, requested an extraordinary general meeting to discuss adjusting the board members. According to Korean commercial law, shareholders holding over three percent can propose an extraordinary general meeting. Kim Dong-hyun tried to block it, but his legal team assessed the situation and told him—it couldn't be stopped.

The shareholders' meeting was scheduled for the first Monday in February. That day, heavy snow fell. The large conference room at Jins Foods's headquarters was packed. Kim Dong-hyun sat on the podium, his face paler than the snow outside. Beside him were several old retainers of the Kim family, their expressions stiff, like eggplants hit by frost.

Chairman Wang Shunyi sat in the front row of the audience, flanked by Zhang Junhao and Park Min-ji. He didn't take the stage, instead having the lawyer speak on his behalf.

'The largest shareholder, Shunyi Foods, proposes adding two independent directors: Mr. Lee Jung-ho, former president of the Korean Food Industry Association, and Professor Kim Mi-kyung from Seoul National University's Department of Food Engineering. Simultaneously, we recommend entrusting the management rights of Jins Foods to a management team designated by Shunyi Foods.'

Kim Dong-hyun stood up, his voice loud: 'This is a power grab!'

A shareholder from the audience shouted, 'Chairman Kim, after losing so much of the company's money, how dare you talk about a power grab?' The conference room erupted in uproar. Some voiced agreement, others looked down at their phones, and some stood up ready to leave.

The voting results: fifty-one percent in favor, twenty-nine percent against, twenty percent abstaining. The proposal passed. Kim Dong-hyun's brother, Kim Dong-chul, was removed from the board. His nephew, Kim Sung-joon, didn't even make the candidate list. The Kim family's influence was significantly weakened, leaving only Kim Dong-hyun himself on the board, but his voting power had been diluted to almost meaningless levels.

After the shareholders' meeting concluded, Chairman Wang Shunyi walked up to Kim Dong-hyun. Kim Dong-hyun remained seated in his chair, eyes fixed on the window; the snow was still falling.

'Chairman Kim, you've worked hard,' Chairman Wang Shunyi bowed.

Kim Dong-hyun didn't look at him. After a long silence, he finally said, 'You've won.'

'It's not about winning. It's about taking over,' Chairman Wang Shunyi straightened up. 'Jins Foods won't disappear. The brand will be retained, the factories will keep operating, the workers won't lose their jobs. It will just live on in a different way.'

Kim Dong-hyun finally turned his head and looked at him. In that glance was resentment, anger, but mostly exhaustion. He said nothing, stood up, picked up the folder on the table, and slowly walked out of the conference room. When the door closed, the sound of his footsteps echoed in the corridor—slow, heavy, as if carrying a mountain on his back.

Chairman Wang Shunyi stood in place, looking at the closed door. Zhang Junhao walked over and asked quietly, 'President, what's next?'

'Open the champagne.'

Zhang Junhao was momentarily stunned.

'Just kidding,' Chairman Wang Shunyi turned around, looking at the people still organizing documents in the conference room. His voice wasn't loud, but everyone heard it: 'Next, we make Jins Foods live again.'