Chapter 358 Joining the Acquisition
When Barron met with Brown before, the two also talked about another issue, which was about joining the euro zone.
In fact, until the end of the original time and space when the UK left the EU, they never joined the Eurozone and maintained the free currency pound...
Here, Brown played an important role.
Since 1999, when Blair was Prime Minister, the British government had promised to eventually join the Eurozone, but this time it had been rejected by Brown, the finance minister, who had been delaying the matter.
Don't think that as Prime Minister, Blair can decide everything, especially Brown, who is the number two person in the Labor Party. After assuming the position of Chancellor of the Exchequer, he has gradually managed this department and other related departments in a monolithic manner. For such economic matters, especially joining the euro zone, Blair must get Brown's support.
There are even rumors that in 2003, in order for Britain to join the euro zone, Blair promised Brown that he would give up his position as prime minister to obtain Brown's consent for Britain to join the euro zone, but this was also rejected by Brown.
There are many reasons why Brown is cautious about joining the euro zone.
First of all, as we all know, each country’s currency system has the function of mediating its own imports and exports. If the UK abandons the pound and joins the Eurozone, it will lose this independent monetary policy, and the consequences need to be evaluated - although, As a "big country" in the EU, Britain has the same right to issue euros as France and Germany. However, after all, the formulation of the euro's exchange rate policy still needs to be discussed and decided, and it may not be suitable for Britain's own economic development. , in the final analysis, there will still be certain restrictions.
In addition, many people think that the big countries will benefit from joining the Eurozone. This is mainly because Germany and France, which are strong economic exporters in the Eurozone, benefit from various tax-free and free preferential treatment within the Eurozone, and their economic development maintains a high speed. ; And weak economies with a high proportion of agriculture have gradually fallen into a fiscal crisis due to the increase in trade deficit and the loss of domestic currency barriers...
But in fact, what worries Brown and those who oppose joining the Eurozone is that after European economic integration, strong countries will often pay for the economic downturn of weak countries...
Take Greece as an example. Before entering the Eurozone, the yield on their government bonds was once above 10%. After joining the Eurozone, it plummeted to the level of 4% of German government bonds, which greatly reduced borrowing costs and actually eased their debt. financial burden.
However, because these European governments pursue a high welfare system, they not only did not actively reduce their fiscal deficits after receiving fiscal dividends, but instead reduced taxes and increased expenditures from 2001 until now.
The Stability and Growth Pact (Stability and Growth Pact) used by the EU to control the fiscal deficits of various countries has also become a piece of paper as major countries such as France and Germany took the lead in violating it.
Take Greece as an example. In order to meet various conditions in the Eurozone, it hired Goldman Sachs to make a fuss about its balance sheet.
After the new Greek government came to power, it exposed off-balance sheet risks and increased its debt ratio calculations, which led to a sharp rise in government bond yields and the crisis began.
Therefore, the Eurozone itself does not increase the financial burden on poor countries. It is short-term political interests that influence long-term economic interests, and ultimately brings crisis.
But these crises will ultimately have to be helped through by the relatively stronger countries in the Eurozone... If Britain joins the Eurozone, they will definitely need to take on this responsibility.
Finally, since 1940, Britain has determined its foreign policy of alliance with the United States. If this is the case, it will inevitably hesitate to join the Eurozone.
After all, at this time, the EU is not as temperless as it was later manipulated by the United States. They are still quite ambitious for the euro. Just like when Saddam was eliminated by the United States, it was not just for "anti-terrorism". He proposed oil settlement. There is also a very important reason for not using the US dollar and switching to the Euro - the United States will not tolerate its US dollar hegemony being broken.
During the Iraq War, most countries in the EU, including leaders France and Germany, criticized the United States for sending troops.
These, to put it bluntly, are all choices based on interests.
The British position is very embarrassing. Between Europe and the United States, they must make a choice. As we all know, the United States is what they chose in the end.
Therefore, after the Iraq War, Blair was not as eager to join the Eurozone as before...
Understanding this, Barron and Brown have the same view on joining the Eurozone, that is, it is necessary to maintain Britain's independent monetary policy.
"However, although we are allies with the United States, we also need to guard against our important industries, including media and people's livelihood industries, being eroded by American capital..."
This is something Barron emphasized to Brown.
When Brown heard this, he looked at Barron and nodded.
…
Based on the Zeuss Fund in cooperation with Goldman Sachs Group, after a year of experience, DS Investment Company established the same high-frequency trading fund in London, called the Hera Fund.
This is also a move made after the Global Industrial Investment Fund acquired the London Stock Exchange and gained certain convenience.
The main trading market of Hera Fund is for the London Stock Exchange, but initially, US$1 billion was invested in trading.
Among the US$1 billion funds, Global Industrial Investment (GII) Fund and Caesars Fund each invested US$500 million.
In addition, there is the Caesar Fund's acquisition of Northern Natural Gas Company. They issued a partial tender offer for this company and prepared to acquire 88% of Northern Natural Gas Company's shares at a price of 2 billion pounds.
In the original time and space, Li Chaoren's Yangtze River Infrastructure acquired 88% of the company's shares for 2.4 billion pounds. However, this acquisition was completed in two parts, in 2004 and 2009, so the total amount will be Higher.
The current total market value of Northern Gas Company is about 2 billion pounds. To acquire 88% of its shares for 2 billion pounds is equivalent to a premium of more than 13.6%. This premium is for a company with relatively stable operations. Still quite satisfactory.
Therefore, this acquisition is also proceeding smoothly.
In addition, Caesars Fund also announced together with O2 Telecom that they will form a consortium with them to participate in the acquisition of Czech Telecom.
As mentioned before, with the recovery of the economic situation, global telecommunications companies have also emerged from the impact of the previous Internet bubble crisis.
So during this period, only in Europe, the previous mergers and acquisitions of telecommunications companies also became active.
For example, just this month, BT completed its acquisition of Albacom, Italy's second largest enterprise-level fixed service provider.
At the same time, the British mobile communications giant Vodafone Group is also seeking to acquire control of two companies in Romania and the Czech Republic...
In this regard, as one of the top three telecommunications companies in the UK, O2 Telecom, in addition to consolidating the French and German markets, CEO Berry Trelles also proposed to Barron the idea of expansion through acquisitions.
His target is Czech Telecom, which is undergoing telecommunications privatization.
Czech Telecom is the largest fixed and mobile phone operator in the Czech Republic. Prior to this, this telecommunications company was 51% controlled by the government and was a state-owned enterprise.
As early as last year, a spokesman for the Czech Ministry of IT announced that the Czech government intends to sell 51% of its shares in Czech Telecom, the country's largest operator, before March 2005, by which time the company will be completely privatized.
This is a good opportunity for many telecom giants to enter the Czech market.
Telecom companies currently interested in Czech Telecom include Swisscom and Telefónica, and now O2 Telecom is also preparing to enter the market.
However, it is obvious that the acquisition of Czech Telecom requires huge funds - currently, for the 51% shares of Czech Telecom held by the Czech government, Swisscom and Telefonica's bids are both around US$3 billion.
As for O2 Telecom, due to its continued huge investment in mobile communications and broadband network deployment, even though it has made a lot of revenue this year, it will certainly not be able to spend so much money at once.
Therefore, in the end, Caesar Fund, which still has a large amount of funds, formed a consortium with O2 Telecom to carry out this acquisition. They will provide financial support for O2 Telecom.
