Chapter 421 Becoming Vice Chairman of Walmart
Sam Walton treated Lin Haoran with utmost respect. He could not possibly have imagined that Walmart would one day become the world's largest retail company, one of the true global industrial giants. At present, Walmart was merely the third-largest retail company in the United States, just an average publicly listed enterprise among many.
Thus, facing a super-wealthy figure like Lin Haoran, Sam Walton maintained extreme reverence. After all, Lin Haoran was now not only a famous tycoon but also a potential investor in Walmart. Should Lin Haoran choose to invest, it would undoubtedly drive up Walmart's stock price.
Recently, Lin Haoran's wildly successful investment in Apple had already caused a great sensation across the United States. In less than a year, he had made over thirty times his original investment—an astonishing achievement!
After hearing Sam Walton's introduction, Lin Haoran shifted the conversation toward the financing matter. "Mr. Walton, I understand you intend to issue an additional 10% of shares to raise 15 million dollars. Could you share how you plan to use these funds?"
Ten percent of the company's shares was a considerable amount. Moreover, Lin Haoran was currently secretly acquiring Walmart's stock. In the future, becoming Walmart's largest shareholder was not out of the question.
From what he recalled, by 1999, Walmart's market value had reached 315 billion dollars, meaning that over the next decade, its market value would grow more than a thousandfold. Moreover, Walmart had a consistent record of increasing dividends for years, showing a very stable dividend policy. Just by holding shares, he would collect significant dividends over time.
Another important aspect was that as a major shareholder, he would easily obtain critical internal information about Walmart's operations. His own Wellcome Supermarket could, in the future, learn from Walmart's experience and expand globally. As for the American market, he could leave it to Walmart, and as a shareholder, he would still reap the benefits.
Sam Walton was slightly startled by Lin Haoran's straightforwardness in addressing the financing matter. However, he quickly composed himself and elaborated on Walmart's funding needs and usage plans.
"Mr. Lin, these funds will be mainly used in two areas. First, to continue expanding the number of stores and increase market share. Second, to optimize supply chain management, reduce costs, and enhance profitability," Sam Walton earnestly explained.
"Could you tell me more about Walmart's next steps?" Lin Haoran asked.
"Mr. Lin, have you heard of the BigK department store chain?" Sam Walton asked.
Lin Haoran shook his head and replied, "Sorry, I'm not familiar with that company."
"It's understandable," Sam Walton continued, "since BigK's business is primarily concentrated in the southeastern United States. It spans nine states and has 120 branches, currently ranking as the fourth-largest department store company in the U.S. However, due to fierce competition, BigK is facing financial difficulties and is seeking a buyer.
This presents a once-in-a-lifetime opportunity for Walmart. If we can acquire BigK, we will immediately leap to the second-largest department store chain in the U.S., second only to Kmart. By then, our strength would be greatly enhanced, with 349 stores across thirteen states and an expected annual sales volume exceeding 2.5 billion dollars.
Therefore, Mr. Lin, if you choose to invest in Walmart, and we succeed in acquiring BigK, I, Sam Walton, guarantee you will not be disappointed!"
Lin Haoran suddenly understood—Walmart planned to grow through acquisition rather than slow organic expansion, a far quicker method.
Normally, opening 120 new stores at Walmart's current speed would take considerable time. After nearly twenty years of growth, Walmart had only achieved 229 stores. Thus, acquiring BigK was clearly a pivotal move in Walmart's development history.
"Fifteen million dollars for 10% of the shares… That's acceptable. I am indeed optimistic about Walmart's prospects," Lin Haoran said after a moment's thought.
Sam Walton's eyes lit up. "Mr. Lin, on behalf of Walmart, I warmly welcome your investment."
He knew that Lin Haoran genuinely had the money—after all, he had just sold off his Apple shares for more than 300 million dollars. Compared to that, 15 million dollars was a relatively small amount.
"However, Mr. Walton," Lin Haoran continued with a smile, "I hope to have the opportunity to join Walmart's board of directors. Of course, I fully respect you and your management team's professionalism and will not interfere in daily operations. Being from Hong Kong, with most of my industries based in Asia, my investment in Walmart is purely financial."
Since he was formalizing the investment, Lin Haoran wanted to go a step further and secure a senior position within Walmart. His goal was simple and clear: not to interfere but to learn closely from Walmart's successful management strategies. These valuable experiences would greatly benefit Wellcome Supermarket's global expansion plans.
Once he became an insider at Walmart, he would have full access to all internal data. With Jardines Matheson already privatized, Wellcome Supermarket was essentially his personal asset too.
Sam Walton nodded and said, "Mr. Lin, you can rest assured. With your 10% stake, you'll naturally qualify as a board member. In fact, I can promise you the position of Vice Chairman of Walmart!"
"Vice Chairman?" Lin Haoran was visibly surprised, not expecting Sam Walton to offer such a high-level title.
It was, without doubt, a prestigious position. However, Lin Haoran quickly grasped the underlying intention. Given that he would not reside permanently in the U.S., the Vice Chairman title would mostly be symbolic. Furthermore, he had already made it clear he would not meddle in operations, reassuring Sam Walton.
Thus, offering him this title was both a sign of respect and recognition of his strength. After all, Walmart was still a relatively modest enterprise, and giving a super-wealthy investor a symbolic title was hardly an issue.
"Mr. Walton, you are indeed decisive. I accept this investment!" Lin Haoran laughed heartily, officially announcing another successful external investment.
However, unlike his quick exit strategy with Apple, Lin Haoran intended to hold onto Walmart's shares long-term—at least until the late 1990s.
Sam Walton beamed. His financing goal had finally been achieved. Although having Lin Haoran as an investor was not as advantageous as attracting Citibank, since banks could offer various additional services, Citibank had already shown no interest. Under the circumstances, partnering with a super-wealthy individual like Lin Haoran was an excellent alternative.
Lin Haoran's handshake with Sam Walton marked the preliminary success of this round of financing.
Sam Walton knew very well that under the current economic environment, Walmart, still a growing but financially average enterprise, would find it hard to attract financing from major financial institutions. Financial groups like Citibank were cautious about Walmart's future and showed no willingness to invest, despite Sam Walton's proactive efforts.
Some American conglomerates did express interest, but their conditions were extremely harsh. They demanded more shares and more control, clearly aiming not merely for investment returns but for gradual takeover.
To Sam Walton, Walmart was far more than just a company. It was the fruit of nearly twenty years of hard work, growing from a single small store into a sizeable enterprise. Handing it over to short-sighted financiers was unthinkable.
Thus, when Lin Haoran, this mysterious Asian tycoon, expressed genuine investment interest, Sam Walton treasured the opportunity. Lin Haoran not only had deep pockets but, crucially, promised not to interfere with Walmart's management. This made him an ideal investor in Sam Walton's eyes.
Walmart's biggest shortcoming at the moment was capital. Without additional financing, it would be difficult to proceed with acquisitions and expansion.
Sam Walton had prepared thoroughly for this opportunity. Thus, after Lin Haoran agreed to invest, he immediately summoned Walmart's New York team to draft the investment contracts.
Within half a day, Lin Haoran's Global Investment Company officially signed the investment agreement with Walmart, and a transfer of 15 million dollars was promptly made to Walmart's corporate account.
Armed with these funds, Walmart could confidently proceed with the acquisition of BigK Department Stores.
One day later, Lin Haoran saw Walmart's official announcement in the newspapers.
Following the successful deal with Global Investment Company, Sam Walton had returned to Bentonville, Arkansas, and publicly announced the news.
The announcement stated that, effective immediately, Mr. Lin Haoran officially invested in Walmart and became the holder of 10% of the company's shares. Additionally, with the unanimous approval of the board, Mr. Lin Haoran was officially appointed as Vice Chairman of Walmart's Board of Directors. Thank you for the support, friends. If you want to read more chapters in advance, go to my Patreon.
Read 30 Chapters In Advance: patreon.com/Albino1