Chapter 497: The Terrified American Media
Although Paramount has experienced its own low period, it does not mean that it has no value of its own.
Previously, thanks to Barry Diller's pioneering work, Paramount has accumulated a large number of IPs in the fields of musicals, horror films, and action-adventure films.
These are Paramount's wealth and are high-quality assets.
In addition, Paramount has its own independent film studio, record company, and television company.
All these will help Baichuan Interactive Entertainment to quickly display its capabilities in the international media field, so acquiring a Hollywood media company is the best choice.
Faced with the acquisition application from the Shirakawa Group, Martin Davis, the owner of Gulf and Western Industries, gave it a brief consideration and the two sides began contact.
Although Paramount did not suffer huge losses at this time, Martin Davis believed that it had no possibility of revival in the short term.
After Paramount lost its three pillars, it fell into chaos and lack of leadership.
The reason why there has been no major turnaround in recent years is directly related to the endless infighting among the top leaders.
So from an investor's perspective, Martin Davis had no reason to force Paramount to stay.
One is willing to take over, the other is willing to make a move, and they are a match made in heaven.
The mutual intentions were confirmed, and soon in March 1989 , the two sides began negotiations on the acquisition.
Because this is a transaction between two large groups, it is necessary to deal with complex matters.
The Shirakawa Group sent Yutaka Arai to serve as the head of the negotiation team. In addition, a large number of lawyers and financial personnel followed the negotiation team to North America.
Of course, Gulf and Western Industries have similar lineups, and even the North American branch of Shirakawa Electric is involved.
Because the entire enterprise, including the assets and personnel of the media company, will be acquired, strict and detailed negotiations are required.
After more than a month of negotiations, the two sides have reached agreement on most issues.
However, there was a big difference between the two parties regarding the final purchase price.
Japan is now at the peak of its bubble, and news about Japanese overseas purchases has repeatedly appeared in Western media.
So at that time everyone knew that the Japanese were rich, especially Shirakawa Kaede, who was ranked first on the Forbes Rich List twice.
Therefore, Western Industries also made an exorbitant offer and showed no signs of loosening up.
Baichuan Feng, who learned the news, also sighed helplessly.
The nouveau riche was the inherent impression of Neon in the West at that time. In addition, Sony's acquisition of CBS Records in 1987 made Westerners more convinced of this.
At the end of 1986, Sony started acquisition negotiations with CBS, and CBS's offer was $1.25 billion.
However, due to the strong opposition from Chairman Palai, the acquisition had to be temporarily shelved.
Nine months later, CBS approached Sony and raised the price to $2 billion.
In less than a year, the price soared by 60%. Faced with such a price increase, Sony did not even bargain, but agreed directly.
So CBS Group sold its CBS Records business for $2 billion.
There is no doubt that the story that CBS's decision to stop raising prices was fully accepted by Sony, a Japanese company, is widely circulated in North America.
Thanks to this impression, although Gulf and Western Industries did not resort to this trick, it did not give in on the price.
They packaged the entire Paramount Group and offered $12 billion.
To be honest, although Paramount is a healthy asset, the price is indeed a bit outrageous.
So when the negotiations entered a stalemate, Baichuan Feng personally called Martin Davis.
He also mobilized the personal connections at Pioneer Navigation and IBM, and finally persuaded Martin Davis to give him a discount.
Shirakawa promised to acquire Paramount for $9 billion and assume its $1.2 billion in external debt.
At the same time, Martin Davis promised that Paramount would be handed over entirely to the Shirakawa Group without any changes to the company's management and key talents.
Baichuan Feng could barely accept this price. Although it was a bit overpriced, it was already the best solution at the moment.
Later in 1993, Viacom acquired Paramount for $10 billion.
So after comprehensive evaluation, $9 billion is a premium, but not much.
After the plan was finalized and both parties signed the contract, Baichuan Feng also made a personal trip to Beimi.
He was there mainly to visit a lady and to sort out SIC's problems.
After these things were settled, the Paramount acquisition was officially disclosed to the outside world.
On May 10, 1989, Shirakawa Holdings announced that the group had acquired Paramount Pictures in its entirety for US$9 billion.
While assuming its $1.2 billion debt, Paramount Pictures officially changed its name to Shirakawa Paramount Worldwide.
As soon as this announcement was issued, it caused a huge stir in the global media.
Western media directly accused, "Shirakawa Group's acquisition of Paramount is an atrocity!" and "Japanese companies are buying the soul of the United States!"
Even in Japan, there are doubts about this transaction by Shirakawa Holdings.
"With $9 billion, there is no way the amateur Shirakawa Group can make money in the movie business!"
“It’s obviously not worth spending $9 billion to buy a declining Hollywood company.”
It can be said that this wave of operations by Baichuan Holdings has been met with criticism from all sides.
It was also an acquisition case. When Shirakawa Holdings acquired Subaru last year, the outside world gave it mostly affirmation.
Since Shirakawa Holdings started out in the physical manufacturing industry, its acquisition of Subaru does not count as a cross-industry move and may even allow it to leverage its strengths.
However, the film and media industry is different, although Shirakawa Holdings also has Shirakawa Interactive Entertainment.
However, compared with the physical industries such as Shirakawa Electric, SIC, and Subaru, it is undoubtedly much less impressive.
Therefore, there are many criticisms about this transaction in Japan.
Even within Shirakawa Holdings, there were many people who couldn't figure it out. Arai Yu once expressed his doubts to Shirakawa Kaede.
However, we will talk about internal issues later. What we need to do now is emergency public relations overseas.
While the Western media were outraged, Shirakawa Kaede also personally made a statement in the North American media newspapers.
"This is not an invasion of Japanese culture, and we don't want to send Japanese managers to Paramount."
This is of course just an excuse, but no matter what, we have to get through this hurdle first.
Movies have always been the pride of Americans. When Shirakawa acquired Paramount, one of the seven major Hollywood studios, it really caused a public panic in North America.
In order to appease the emotions of the North American people, Baichuan Feng had to come out in person to explain.
In addition, the next day he announced the acquisition of the independent film company "Jaffe-Lansing Films" for US$200 million.
At the same time, Stanley Jaffe was officially appointed as the general manager of Paramount Media and Shirley Lansing was appointed as the executive president of Paramount.
The front-page headline of the New York Times that day was a photo of Shirakawa Kaede and Shirley Lansing hugging each other intimately.
The headline of this news is, "The first woman in Hollywood history to lead seven major film groups."
The publication of the New York Times once again ignited public opinion in North America.
Shirley Lansing is no unknown figure in Hollywood. She served as general manager of 20th Century Fox in 1980.
He started as an actor in 1970 and switched to producer in 1974. He has produced many excellent films.
Although he founded a film company with his good friend Jia Fei in 1984, he still has strong connections in the industry.
Of course, her personal ability is unquestionable, but this still made North America jaw-dropping.
As the first female CEO of one of the seven major film studios in Hollywood history, this gimmick is quite topical.
The Women's Rights Protection Association was the first to jump out and highly praised Shirakawa Holdings' decision.
They claim that this is a reflection of fair treatment of women's work abilities and that the Shirakawa Group is an open-minded company.
With their lead, people in Hollywood who were friends with Shirley Lansing also began to tell the media that this was a groundbreaking move.
Of course, Shirley Lansing's own abilities are sufficient for this appointment. In short, the appointment by Shirakawa Group is an extremely correct decision.
However, while some people appreciated it, others opposed it. Conservatives began to mock the Shirakawa Group for handing Paramount over to a woman and just waiting for bankruptcy.
The Women's Rights Protection Association was unhappy to hear them say this.
So the daily scene happened again, and women's rights defenders and the New Right organizations began to engage in a verbal battle in the newspapers.
The public opinion was in turmoil, and Shirley Lansing became the first female leader in Hollywood.
These hot topics even overshadowed the depth bomb of Shirakawa Holdings' acquisition of Paramount.
This move to divert the focus of public opinion was, of course, the work of Shirakawa Kaede.
If you want to get off the hot search list, of course you have to find something more popular to get in the way.
In addition to announcing Paramount's new president, Shirakawa Holdings also announced SIC's plans to go public.
In addition, Shirakawa Electric and Shirakawa Interactive Entertainment will also seek to be listed on Xiaomi in the future. After this series of plans were announced, reports in the public opinion about Paramount's change of ownership gradually decreased.
While taking over Paramount, we also gave some returns to North America.
Especially since SIC is a high-tech enterprise, its listing in the United States is enough to show Shirakawa Group's determination to deepen its roots in North America.
Wall Street is not very interested in Paramount, but is very concerned about SIC.
In recent years, as Apple, Compaq and IBM have successively cooperated with SIC, this company, which was the first to focus on the processor field, is now capable of competing with Intel.
The wave of computers has gradually begun to rise, and the importance of chip companies has become increasingly prominent.
Therefore, SIC was first listed in North America, which was definitely a good opportunity for Wall Street to invest in new stocks.
Although they took Paramount from North America, they also launched SIC, which can be considered a balance of interests.
As for Shirakawa Electric's listing in Mi, it was just going with the flow.
A company can be listed on exchanges around the world at the same time, and there is no conflict.
Of course, being listed several times does not mean that its market value will change. After all, the total value is certain.
The only difference is that in addition to the primary listing location, there is also an option of a second listing location for newly issued shares.
If Shirakawa Electric wants to truly go abroad and exert influence worldwide, then globalization is a must.
But then again, Shirakawa Kaede's decision to acquire Paramount was not entirely about entering the film and entertainment industry.
For the sake of Shirakawa's brand awareness, he has deeper considerations.
