CH100 - $100,000

Eunsung Cha first learned of the name OTK Company during the CarOS sale. Eunsung Cha sold a subsidiary that was no different from an ugly duckling for $88 million to OTK Company. It was not even half a year after the sale that he realized the company was a swan.

If OTK Company had not stepped in to acquire it back then, CarOS would still have remained a subsidiary, and Eunsung Cha could have secured the core technology of autonomous driving.

MC Gerard Clark of the well-known automotive program Top Motor mocked, 'Eunsung Cha selling CarOS to OTK Company is as foolish as Russia selling Alaska to the United States.'

Subsequently, OTK Company used CarOS to directly enter the automotive industry and rose rapidly as a competitor. Moreover, they showered all kinds of support and successfully got Ronald Stamper elected as the President of the United States.

Eunsung Cha's sales volume in the U.S. market last year was 1.65 million units, accounting for 20% of the total sales volume of 8.3 million units last year.

This year's sales volume and market share were similar. However, it was difficult to foresee the situation for next year.

Ronald's emphasis on U.S. protectionism and trade protection was the worst-case scenario for Eunsung Cha.

Ronald clearly stated that he would impose tariffs on imported cars and provide incentives for cars produced domestically. This applied not only to automobiles but to all manufacturing industries.

The situation was like a sword hanging over Eunsung Cha. Currently, Eunsung Cha has only one factory in Georgia in the United States.

On the other hand, they have three factories in Mexico and are in the process of constructing an additional one. The majority of the production from these facilities is exported to the United States.

Eunsung Cha found itself in a tight spot. Amid discussions of halting the construction of the Mexican factory and building a new one in the United States, it was realized that the progress of the project was over 70%, and establishing a new factory in the U.S. required processes like land acquisition, recruitment, and negotiations with labor unions.

All of this would not have happened if it were not for OTK Company.

Initially, thinking that Oh Taekgyu was the CEO, little attention was paid to Kang Jin-hoo. However, upon realizing that Kang Jin-hoo was the CEO, a thorough investigation was conducted, leading to the shocking revelation.

There was a subcontractor named DHK Engineering, and the company went bankrupt after losing a patent battle with Eunsung Motors. In the process, the CEO died from a brain hemorrhage.

Upon examining the supposedly crucial patent, it turned out to be insignificant. From the perspective of a small to medium-sized enterprise, it might have been a hard-earned development, but for a large company, such a patent was dispensable.

However, once you start tolerating these things one by one, it never ends.

People often mistakenly believe that if you have money, you spend it easily. But whether rich or a large corporation, one never spends money recklessly.

Of course, they spare no expense where necessary. They willingly pour hundreds of billions or even trillions into factory construction, R&D, marketing, and the like.

But wasteful spending is strictly avoided. It's common practice to cut subcontractor products down to the nearest unit for cost savings.

Subcontractors may choke on those 1 or 2 cents, but if all aspects are considered, the cost rate increases and operating profits decrease.

Furthermore, small to medium-sized enterprises with core technologies and patents sometimes become an indispensable force to large corporations, so it was necessary to crush the weeds before such a situation arose.

The role of a subcontractor is to produce the parts needed by the principal company, and if they develop technology in the process, it's natural for the principal to own it.

It's not just Eunsung Motors; other large companies behave similarly.

The issue lies in the fact that the deceased CEO of DHK Engineering was the father of Kang Jin-hoo. When this fact came to light, chaos ensued within Eunsung Motors.

"Could it be for revenge?"

Considering the past actions of OTK Company, such suspicions were not unfounded. When OTK Company jumped into the X-Cop acquisition battle, those suspicions turned into conviction.

Eunsung Motors had entrusted all security operations to D.S., a subsidiary of the Samsung Group. However, recently, the relationship between the two groups has been strained.

With Ronald's election casting uncertainty on foreign markets, the importance of the domestic market had only increased.

Eunsung Motors Group was not only comprising subsidiaries but also a vast manufacturing kingdom encompassing first, second, and third-tier collaborative companies.

To effectively maintain and control this kingdom, a security company was necessary. Hence, the plan was to acquire X-Cop during this opportunity and integrate it as a subsidiary.

The preliminary bids went as expected: similar companies were eliminated, leaving only five prominent ones.

Eunsung Motors Group, Canline Group, KRR, RCK Bros, and OTK Company & Golden Gate Consortium.

Now, the final bid was just twelve hours away.

***

Currently, the focus of automotive companies is on future cars. All companies are dedicated to developing autonomous driving and electric vehicle technologies.

Related startups have also sprung up like mushrooms. Over 90 percent of them end up failing and disappearing, but among them, some truly create proper technologies.

Initially, Eunsung Motors treated these startups the same way they would subcontractors: seizing their technology and patents and headhunting key personnel.

However, while this method may secure immediate technology and patents, it did not have lasting effects.

Leading IT companies like Google or Apple spend millions of dollars acquiring small startups with just a few employees, not because they have so much money to spare, but because technology can be bought, but a company's culture and philosophy are hard to replicate. Therefore, they believe it is more efficient to buy and support entire organizations, even at a higher cost.

Realizing this late, Eunsung Motors established a mergers and acquisitions team under the group and personally brought in Han Chanyoung, who was the Korean manager of Redstone Group, an American private equity fund, along with his team.

Back at Eunsung Motors headquarters, a late-night meeting was held to determine the bid price.

In the meeting room, five team members, including Han Chanyoung, analyzed the data until the end to determine the bid price. They were all top talents with extensive experience in mergers and acquisitions.

They must buy it.

But they must buy it as cheaply as possible.

It is their role to solve dilemmas like this.

Han Chanyoung also stayed in the meeting room instead of going home.

Perhaps not only the Eunsung Group but also other companies will determine the bid price only at the last minute.

"Who among the four companies is the strongest competitor?"

In response to Han Chanyoung's question, Team Leader Seo Sangwon replied, "RCK Bros."

"What about the other companies?"

"KRR is insensitive to the Korean situation. They find it hard to spend large amounts because they lack an understanding of the market. Canline Group recently replaced their Korean representative with Lee Jongho. Given that this bid is their debut, they probably won't bet a hefty sum."

"And OTK Company and Golden Gate Consortium?"

"Golden Gate is an investment bank. Although it has a private equity fund subsidiary, mergers and acquisitions are not its main business. OTK Company also has experience in venture capital, but they have not encountered such large deals before.

OTK Company's CEO, Kang Jinhoo, is still in his twenties, while Oh Hyunjoo, the head of Golden Gate's South Korea branch, is in her thirties.

It's impressive that they have reached such positions at a young age, but on the flip side, it means they both lack practical experience.

Listening to the conversation, Han Chanyoung found the ways of the world quite intriguing.

'If DHK Engineering hadn't failed and the CEO was still alive, would Kang Jinhoo be attending school?'

If so, CarOS would probably still be in obscurity, and Ronald wouldn't have been elected.

In the end, everything is just speculation. What matters is resolving the immediate issues at hand.

"On the other hand, RCK Bros, being a Korean private equity fund, has a deep understanding of the Korean market. There is no need to say more about Chairman Ryu Cheol-gyun and Vice-Chairman Shin Byeong-doo."

"Didn't RCK Bros offer the lowest price among the companies in the primary bid? Could they be lacking in financial strength?"

Although the preliminary bid amounts were not publicly disclosed, the companies had some understanding among themselves.

Typically, private equity funds raise half of the acquisition funds from limited partners (LPs) and secure the remaining half through senior bank loans.

Recently, RCK Bros have been exhausting a significant amount of funds through several mergers and acquisitions with Chinese companies. This could be putting a strain on them.

However, Team Leader Seo Sangwon had a different perspective. Having worked at Redstone Group for the past 20 years, he understood the workings of private equity funds better than anyone.

"We should not be complacent. A 'Low Ball' strategy will likely be used to deceive competitors by offering a low amount in the preliminary bid and then raising it in the final bid."

Especially since Vice-Chairman Shin Byeong-doo is personally overseeing this deal, the intent for acquisition seemed certain. At least from his point of view, there was no intention to raise the price only to withdraw later.

RCK Bros have shown themselves to be bold players in the past. When they deemed a deal necessary, they boldly invested and achieved unexpected victories.

"How much do you think we should bid?"

Until just before the bidding started, they had considered $2.7 billion as the upper limit. However, based on the preliminary bid results, $2.7 billion was almost like the lower limit.

Whoever takes it, they would have to spend more than that."

Team leader Seo Sang-won finally spoke after a long deliberation.

"In my opinion, it's at least 2.8 billion dollars, but maybe even 2.85 billion dollars."

Is it 3.8 trillion or 3.135 trillion?

In terms of amount, this acquisition is the largest in Eunsung-cha's history.

Even for the second-largest conglomerate in the industry, investing in trillions is a significant burden. The initially estimated amount in the high 2 trillion range has suddenly crossed over 3 trillion.

And not only that, it continued to increase by hundreds of billions.

Whether it's 30,000 won or 31,000 won, the difference is not significant. Would you really haggle over an extra 1,000 won?

But changing it to 3 trillion or 3.1 trillion completely alters the conversation.

While it's only 3%, a billion is enough to buy a whole company listed on the KOSDAQ.

Given the substantial amount, caution is inevitable.

"How much should we spend to secure the victory?"

"It's 2.88 billion dollars."

Han Chan-young looked sharply at him.

"Are you sure?"

Team leader Seo Sang-won nodded confidently.

"Yes."

He also believed that this amount would be sufficient.

But…

For some reason, he couldn't shake off his concerns about OTK Company.

"What is Kang Jin-hoo really thinking?"

Is the goal truly to acquire or merely to drive up the price?

In the main bid, if the bid price is significantly higher than the second-ranked company, even if the acquisition is successful, they might face criticism.

It may be unnecessary worry, but certainty can't hurt.

"I think it's better to spend an extra 50 million dollars."

Seo Sang-won nodded in agreement.

"It's too much. There is no need to go that far."

Han Chan-young said firmly.

"I take responsibility. We must win the bid for X Cop."

***

There are several methods for corporate sales.

The method commonly used for large-scale properties is the Progressive Deal. This involves competing the two or three companies that have passed the initial bidding with a certain amount above the bid price.

Utilizing the Prisoner's Dilemma in the sales process has the advantage of maximizing the final price.

The higher the amount each party offers, the less advantageous it becomes for them. However, since each party does not know how much the other has bid, they must assume a higher amount to outbid them.

If there was sufficient time, Morgan Stanley, the sales agent, would have likely chosen this method. However, Tyco Group urgently requires cash before the year-end.

Therefore, they decided to go with a sealed auction format in which the highest bidder in the initial bid wins. In this case, the bidder who submits even a penny more will win the bid.

Hyunju delegated the task of determining the bid price to me. While others may perceive it as the CEO and COO deliberating overnight to set the bid price, I spent the night playing games with Taekgyu leaving the section for the amount blank on the document at the office.

As I put down the gamepad and lay on the couch, I muttered,

"How much should we bid?"

Taekgyu replied as if it were obvious, "Just adding one dollar more should do, right?"

"The minimum bid increment is $100,000."

"Then let's just add exactly $100,000 more. $2,930,100,000."

"But what if Eunsung Cha's bid is the highest? What if KRR, Canline Group, or RCK Bros bid higher?"

"In that case, we back off."

"… "

It's a valid point. That part is beyond my control.

With just a $100,000 difference, I wonder how Eunsung Cha will react.

Ring!

The intercom on the table rang. The call was from the lobby.

Taek-gyu pressed the speakerphone.

[A delivery has arrived at Hwangmungak.]

Normally, for security reasons, deliveries or packages are received in the lobby and then delivered. However, Taek-gyu was fine with it and instructed them to send it up.

Unless you swipe a card in the middle, the elevator doesn't stop on other floors.

After a short wait, a Chinese restaurant delivery man carrying an iron lunchbox came up to the 38th floor.

He probably didn't expect that someone in the CEO's office had ordered jjajangmyeon, as the delivery man looked around in surprise.

"The, the delivery has arrived… Are you sure you ordered it here?"

"Yes. Please leave it here."

Jjajangmyeon, jjamppong, tangsuyuk, and fried dumplings were placed on the table in succession.

"We didn't order the fried dumplings."

"It's a complimentary service."

"Oh! I'll tell the staff to order more from here."

The delivery man happily bowed at Taek-gyu's words.

"Thank you, Chairman! I will work hard."

It seems like the company president came for the delivery personally.

"You can return the dishes to the lobby later."

"Yes. Please enjoy your meal."

After the delivery man left, we sat around the table and opened the plastic wrap. It had been a while since I had jjajangmyeon.

I never thought we would end up ordering to the CEO's office too.

"Do you think even executives from large companies order jjajangmyeon for late-night snacks sometimes?"

"I doubt it."

Taek-gyu said while mixing the jjajangmyeon.

"Think about it. Whether you have money or not, jjajangmyeon tastes good for everyone. Do you really think the executives of large companies would dislike it?"

"….."

"Fair point."