241-242

*Chapter 241: Launching a Blitzkrieg in France*

While Eileen was happily skiing outside, Milo continued to work.

After reviewing all the data compiled by the Blackburn Foundation on France's fashion industry, wine sector, and retail market, Milo began to ponder.

He was well aware that the United States had long been infiltrating France, and Europe as a whole, in various ways. The Marshall Plan, which helped Europeans rebuild their economies and stave off the spread of communism, was one such method of influence.

The plan was undeniably successful, particularly under the immense military pressure of the Soviet Union at the time.

One could say that Europe willingly placed itself on the metaphorical chopping block prepared by the Americans. Decades later, Europe became what is now often referred to as “Old Europe.”

Take the three major powers, for instance.

*The British?*

They hardly needed infiltration.

After the so-called "Iron Lady" came to power, it took only a few years for Britain to become, for all intents and purposes, another Canada in America's eyes.

The British Isles became America's equivalent of Canada in Europe. The only things the British could cling to were their historical status as overlords of the original 13 American colonies and their role as the "mother country."

This explains why, despite being firmly under America’s control, the British still occasionally push back, sometimes with veiled sarcasm. Many Brits remain defiant, holding onto a sense of superiority because, after all, they are America’s ancestors.

*As for Germany?*

Its so-called "original sin" made it remarkably easy to manipulate.

Defiance? Just look at the sheer number of military bases and troops stationed across Europe—enough to deter any dissent.

And then there’s Eastern Europe.

Even Russia, in its current state, behaves like a wounded lapdog—abused, beaten half to death, only for the "goddess" to feign remorse and say, "I didn’t mean it." Then, it comes crawling back, eager for any scraps of attention.

The smaller Eastern European nations? They’re all rushing to embrace America with open arms.

Frankly, if Milo weren’t a reincarnated soul, he might see things differently. From the perspective of an American, the current global landscape is one of unmatched dominance. Most countries in the world eagerly look up to America as their beacon of hope and civilization.

Given such a reality, it’s hard to blame Americans for developing the self-assured belief in their divine mission: “America, Number One.”

Apart from one or two exceptions, the rest of the world seems to bow to America.

Yet, there are always exceptions—nations and individuals with a backbone. Among them are the great power in the East and, in Europe, France.

From Charles de Gaulle to his successor Jacques Chirac, who carried on his legacy, France has maintained its resistance.

However, Milo understood that after Chirac, France would eventually fall into American hands.

For now, though, the French still possessed a degree of immunity to American influence.

This was why, when Milo decided to target France, he had to be strategic. He opted for industries like fashion, wine, and retail—fields that were less likely to provoke strong resistance or raise national security concerns. Sensitive sectors like aerospace or heavy industry, which are vital to the nation's economy, were off-limits for now.

"Andre, here's the plan," Milo began after finishing his deliberation.

"You need to establish a strong foothold in France's fashion, wine, and retail sectors. Our short-term goal is simple: create a solid presence in these three industries."

Andre was taken aback but quickly nodded, ready to take notes.

Unbothered by Andre’s surprise, Milo continued, "I understand the European branch doesn’t have sufficient funds for this. I’ll allocate the necessary resources directly. Your job is to fully cooperate and execute the strategy. Do you have any issues with that?"

Overjoyed, Andre shook his head vigorously and replied, "No problem at all!"

Milo’s decisive leadership left Andre in awe. The boss truly lived up to his reputation—bold and commanding.

This could be Andre’s big break.

Within companies like Paladin Media and the Blackburn Foundation, internal competition was inevitable.

For example, the Primogeniture Faction, led by veterans like Shabotai, held significant sway due to their Bostonian roots and their status as Milo’s earliest advisors. They had done the most work and, naturally, enjoyed the greatest influence in Milo’s circle.

In contrast, the Rising Stars, led by Andre, came from diverse backgrounds. Most were global industry elites recruited after Milo took over Yahoo.

However, due to trust issues and timing, the Rising Stars had been somewhat sidelined within the Blackburn Foundation.

Although the competition wasn’t overtly hostile—both sides feared incurring Milo’s displeasure—it was still very real.

The Primogeniture Faction held an overwhelming advantage in Milo’s existing business empire, leaving the Rising Stars to carve out opportunities in new ventures.

Europe, fortunately, presented such an opportunity.

Andre himself was of Russian descent, having immigrated to the United States at the age of seven or eight. With Milo planning an ambitious expansion in Europe, Andre saw this as his chance to shine.

Milo nodded slightly, satisfied. "In France, our top priority is clear: acquire LVMH Group."

"Form a dedicated acquisition team immediately and draft an initial acquisition plan for me to review. I’ll personally oversee this process."

"In addition, assign personnel to research the market conditions and major companies in the three target industries. I expect detailed reports ready for immediate reference when I need them."

"Do you understand?"

Milo's decisive and efficient demeanor was fully evident, and this was also the first real task his boss had undertaken in Europe. Naturally, André agreed without hesitation.

After all, completing these tasks wasn’t difficult—the key was doing them well to leave a better impression on the boss.

With a serious expression, he said firmly, "Boss, I guarantee the task will be completed!"

A faint smile appeared on Milo's otherwise stern face. He nodded slightly and said, "Good! I'll be watching your performance. Get to work quickly!"

"Understood, Boss. I'll get started right away!"

With that, André slowly exited Milo's office.

---

A few days passed in the blink of an eye.

By the time Milo had returned to London with Irene after their vacation, André was already prepared.

Early in the morning, when Milo arrived at the office, André walked in with a confident smile and steady steps. He presented the results of his work.

"Boss, here’s all the information you requested about the LVMH Group."

"This is the list of acquisition team members, as well as the acquisition plan we’ve drafted. Please review it."

Milo glanced at the rather thick dossier and realized it would take at least an hour to go through it.

He didn’t want to take up André's time unnecessarily.

With a smile of approval, he said to André, "Great efficiency. I'll review this first and call you if needed. You can get back to your other tasks for now."

"Understood!"

After André left, Milo opened the file on what would one day become a globally renowned company.

---

LVMH Group was formed through the merger of two major conglomerates—or more accurately, three.

One of them, Moët Hennessy, was itself the result of a merger between two large wine and spirits companies.

Once one of France's largest wine and spirits groups, Moët Hennessy had originally ranked third in the French market.

The wine and spirits market includes a wide variety of categories such as champagne, brandy, red wine, and absinthe.

Moët Hennessy had been a leader in two of these categories: champagne and brandy.

This brings us to the history of Moët Hennessy.

The group was formed in 1971 through the merger of Moët & Chandon, a champagne industry leader, and Hennessy, the global king of brandy.

Although the two companies had merged, they initially operated independently in terms of production. This arrangement ensured smooth operations and maintained the quality of their beverages.

According to the documents, Moët & Chandon owned 664 hectares of vineyards, producing various champagnes that accounted for one-quarter of France's champagne exports.

Hennessy, on the other hand, was no less impressive. Although it directly owned only 585 hectares of vineyards, it had contracts with 25 other vineyards, securing their entire grape production.

Hennessy also boasted 28 distilleries, giving it immense industrial production capacity.

This strategy enabled Hennessy to achieve remarkable output.

A financial report from ten years ago revealed that Hennessy sold 130 million bottles of brandy worldwide, commanding 41% of the global cognac market. Hennessy brandy became synonymous with brandy itself.

The merger of these two giants significantly strengthened their market position.

---

Additionally, over 20 years ago, Alain Chevalier, a professional manager who self-recommended himself as CEO of Moët & Chandon, played a pivotal role in merging the two companies.

Chevalier was ambitious and didn’t want Moët Hennessy to remain constrained.

In 1978, he led the group to acquire the perfume distribution business of Boussac, a large textile company with 30,000 employees. This acquisition brought Dior, Labs, and Roc perfume brands into the fold.

---

Then came Louis Vuitton, which primarily dealt in handbags, travel goods, small leather items, and bespoke services.

The original Louis Vuitton company was relatively obscure since it wasn’t publicly listed.

This changed with the arrival of Bernard Arnault, who brought in some American funding.

Louis Vuitton began diversifying into accessories, footwear, ready-to-wear, watches, and fine jewelry.

Though it hadn’t yet reached its later heights, with over 400 global stores, it currently operated 64 outlets worldwide.

---

The merger of these entities formed the modern LVMH Group.

Due to the unique characteristics of the luxury industry, the group’s subsidiaries largely operated independently despite being under the same corporate umbrella.

The current president of LVMH Group is Bernard Arnault, who orchestrated the mergers and acquisitions.

As the largest shareholder, Arnault currently lacks the title of “Napoleon of Luxury,” which he would earn later.

However, the wave of acquisitions in the global luxury industry was set in motion by him.

Fortunately, while LVMH Group is powerful, it hasn’t fully expanded beyond Europe yet.

As a publicly listed company, the post-merger LVMH Group currently has a market capitalization of 35.85 billion French francs, approximately $6.3 billion.

The company has 324 million shares in total, with its stock closing yesterday at 123.75 francs per share.

---

In terms of equity structure, the distribution aligns with Milo's expectations.

Thanks to the group’s history of mergers and acquisitions, its shareholding structure is relatively dispersed.

Bernard Arnault is the largest shareholder with a 34.4% stake.

The Vuitton family is the second-largest shareholder, holding 9.5%.

The Hennessy and Moët families follow as the third and fourth-largest shareholders, with stakes of 8.5% and 8%, respectively.

The remaining shares are held by banks (26.8%), investment institutions (5.4%), and individual investors (8.9%).

Together, Arnault and the three families control over 60% of the shares, ensuring firm control of the board.

However, due to the group's continuous acquisitions, it has spent over $7 billion on acquisitions since 1988.

In the luxury sector, which is not yet as extravagant as it will become in the future, this level of spending is noteworthy.

Seven billion dollars—Bernard Arnault and the LVMH Group clearly couldn’t come up with that amount directly.

So, they mortgaged a significant number of shares, secured loans from local French banks and other financial institutions, and issued corporate bonds.

Their debt totaled nearly five billion dollars.

Compared to their market valuation of 6.3 billion dollars, this was still relatively healthy by Wall Street standards.

However healthy it might seem, it was still a vulnerability to some extent.

After reviewing the company’s information, Milo appeared relaxed and was in an exceptionally good mood.

Even without reviewing the acquisition plan prepared by André and the others, Milo’s mind was already brimming with numerous strategies to target such a shareholding structure.

He had chosen the right acquisition target!

If it were Hermès or Chanel, it would have been a different story. Without resorting to straightforward and aggressive business tactics, they would have likely hit a wall.

After a brief rest, Milo opened the acquisition proposal created by André and his team. A quick review revealed it to be quite well-crafted.

Still, there was room for improvement.

The key issue was that the acquisition team didn’t fully grasp Milo’s determination and financial resources. As a result, what seemed like a bold plan still had certain limitations.

Determined to quickly establish a foothold in the fashion industry, Milo decided to launch a blitzkrieg-style campaign in France. He also saw this as an opportunity to make a name for both Paladin Investments and himself.

He wasted no time.

Milo made a few revisions to the acquisition proposal.

Then, he summoned André and instructed him to draft a new version immediately.

At 3:00 PM, Milo gathered the entire acquisition team. Based on each team member’s role, he assigned specific tasks to everyone.

With his command, Paladin Investments began operating at full speed.

(End of Chapter)

*Chapter 242: Playing Dirty—An American Specialty*

The next day.

At the headquarters of BNP Paribas.

This is one of Europe’s premier global banking and financial institutions, previously ranked by Standard & Poor's as one of the top four banks in the world.

It’s even regarded as the central bank for many small African nations, with their currencies issued by this French commercial bank.

This morning, the current president, David Baptiste, warmly welcomed André.

Paladin Investments has a strong business relationship with BNP Paribas, particularly in financial allocation services.

In a way, BNP Paribas is also a member of Wall Street, albeit on its periphery. It often collaborates with Deutsche Bank and London-based banks in exploiting the Global South.

For example, during last year’s Southeast Asian financial crisis, the two sides had worked together.

Not to mention, earlier this morning, Baptiste received a report from his subordinates that Paladin Investments had transferred a staggering $1.5 billion into their account at the bank.

While he didn’t yet know Paladin’s intentions, such a significant deposit from a major client naturally warranted his enthusiasm.

“André, welcome! Please, have a seat!”

Within the Milo Group, André held the title of Deputy Consultant and Vice Chairman of the Blackburn Foundation. However, externally, Milo had temporarily appointed him as CEO of Paladin Investments and Paladin Capital’s European branches.

While Milo and Eileen traveled, skiing in the Alps or boating along the Thames, André and his team were far from idle, traveling across Europe.

“The usual coffee as last time?” Baptiste asked warmly.

“Yes, thank you.”

After some pleasantries, Baptiste’s secretary brought steaming cups of coffee for both men.

André got straight to the point: “President Baptiste, I’m here today to discuss two potential collaborations with BNP Paribas.”

“To demonstrate our sincerity, we’ve already deposited $1.5 billion into our account at your bank. I trust you’ve been informed?”

Baptiste raised an eyebrow before smiling and nodding. “Yes, I received the report this morning. Thank you for trusting us with such a significant sum. My dear André, you can count on BNP Paribas as one of the world’s most professional banks. We are absolutely trustworthy.”

“Of course, I’m also delighted to serve your company’s needs. May I ask what kind of collaboration you have in mind?”

For a bank, capital is paramount. With money, they can leverage it to generate profits. Baptiste was determined to fully utilize this deposit to bolster BNP Paribas’ strength.

Fifteen billion dollars in 1997—and in cash—was immensely attractive to a bank.

If this sum were sent to a certain Eastern country, even their top officials might personally meet you.

Milo didn’t need that; he had already met them.

André took a proposal from his briefcase and handed it to Baptiste.

“President Baptiste, this is our company’s collaboration proposal, detailing our business needs. Please take a look.”

“Sure.”

Baptiste took the lightweight document and quickly skimmed through it.

As he read the first part, his brows furrowed instinctively.

Paladin Investments was interested in acquiring shares in LVMH Group?

What were the Americans planning?

Were they looking to short-sell or invest heavily in LVMH? Or perhaps they aimed to take a stake in this top-five global fashion and wine conglomerate?

Truth be told, Bernard Arnault, LVMH’s chairman, also had dealings with BNP Paribas.

In fact, both his personal and corporate accounts with LVMH currently owed money to BNP Paribas.

But that was normal.

Whether it was the wealthy funding their lifestyles or entrepreneurs expanding their businesses, or even large corporations growing, most frequently turned to banks for loans. And banks welcomed this activity—it’s how they made money.

Milo’s approach of profiting primarily from the financial markets was relatively rare.

Most traditional banks still earned their income through conventional lending.

Although Baptiste had a good relationship with Arnault, business was business, and profit was non-negotiable.

Suppressing his initial reaction, Baptiste continued reading. As he progressed, his expression softened, and he began calculating internally.

André, meanwhile, remained patient, sipping his coffee as he waited.

Finally, Baptiste placed the proposal on the table.

André smiled and asked, “President Baptiste, are you willing to proceed with these projects?”

Baptiste nodded with a smile. “Of course. I see no reason to refuse.”

Indeed, despite BNP Paribas’ good relationship with Bernard Arnault and LVMH, profits were paramount, and every penny counted.

“That said, specific negotiations will require your team to work with our designated representatives.”

Paladin Investments aimed to acquire BNP Paribas’ stake in LVMH Group, along with the debts owed by Arnault and his company.

To maximize benefits, the process would certainly involve dedicated negotiation teams.

André nodded and clarified, “President Baptiste, I hope we can finalize the first collaboration quickly and then proceed with the second project.”

“Moreover, confidentiality is crucial. As you’ve noticed, our proposed commission is exceptionally generous. I doubt any company in France could refuse such a deal, but we’re working exclusively with your bank. If there’s a leak, it could create significant problems for us and reduce your profits, wouldn’t you agree?”

Baptiste picked up on the underlying implications of André’s words.

He wasn’t offended but instead nodded solemnly and assured him, “President André, rest assured. Our bank has never crossed professional boundaries and will fully protect our partners’ interests.”

“I’ll convene a short meeting with the relevant personnel today and give you an update by phone this afternoon. Does that work for you?”

“Of course, I look forward to your good news,” André replied with a slight smile.

André came and left quickly.

After he departed, Baptiste reviewed the proposal once more.

He still couldn’t quite figure out what the Americans were planning.

Were they trying to acquire LVMH outright?

Or were they bullish on its future and seeking long-term investment?

Perhaps it was just a short-term play?

Unable to determine their motives, Baptiste issued some instructions to his secretary.

Paladin Investments had presented two projects for collaboration.

The first step was acquiring the equity and debt held by BNP Paribas in the LVMH Group. The second step involved entrusting them with cash purchases of equity and debt held by other banks and institutions.

These two collaborations were bundled together—the first step had to be completed before moving on to the second.

As a result, BNP Paribas would only earn a limited profit from the first collaboration.

Additionally, the second acquisition needed to be executed swiftly. The lower the acquisition cost, the higher the profit. These acquisition terms from Paladin Investments ensured that BNP Paribas would do everything possible to complete the equity acquisitions quickly and discreetly.

If the plan were to be leaked, allowing LVMH and Bernard Arnault to catch wind of it, the damage to BNP Paribas' reputation would be minor compared to the major losses in profits. If the expected gains failed to materialize, BNP Paribas shareholders would likely tear Baptiste apart afterward.

This was precisely the "surprise" Milo had prepared for Bernard Arnault.

Before approaching the three major shareholders—the Moët family, the Hennessy family, and the Vuitton family—Milo needed to prepare thoroughly to ensure success in one decisive strike.

That afternoon, David Baptiste responded to André, and the two sides began negotiations the following morning.

Paladin Investments and BNP Paribas had previously collaborated, and David Baptiste was not short-sighted. He had already set the tone for his subordinates.

In this endeavor, Milo spared no expense to ensure success, so the acquisition team's offer from Paladin Investments was exceptionally generous.

After only two rounds of negotiations, the first collaboration was swiftly finalized.

BNP Paribas transferred its 9.4% stake in LVMH Group to Paladin Investments for $658 million, representing a 28% premium. Additionally, it transferred $520 million worth of corporate bonds (denominated in francs) with a 1% premium, as these bonds were nearing maturity. Since BNP Paribas had almost collected all the interest, the premium couldn’t be too high.

The funds for these two transactions were directly debited from Paladin Investments' BNP Paribas account. However, to ensure safety and evade regulatory scrutiny, the equity and debt in LVMH Group were still held in BNP Paribas' name for the time being.

This approach accounted for the current regulations in France’s financial markets. According to these rules, a new shareholder of a listed company must notify the company and the financial regulatory authority when increasing their stake beyond thresholds of 5%, 10%, 15%, 20%, 25%, 33.33%, 50%, 66.66%, 90%, and 95%. However, if an existing shareholder transfers equity through a cash transaction, the trade does not need to be disclosed publicly, nor does the holding need to be reported to the exchange within two weeks.

By adhering to this rule, Milo could acquire as much equity as possible off-market. The only prerequisite was sufficient cash.

To motivate BNP Paribas and give them peace of mind during the acquisition process, Milo ensured another $3 billion was deposited into Paladin Investments’ BNP Paribas account within three hours of completing the first transaction.

When Baptiste heard the news, he was so elated he could hardly contain himself.

Fifteen billion dollars earlier, followed by another thirty billion dollars—forty-five billion dollars in total! Initially unsure, Baptiste was now absolutely convinced: the Americans were undoubtedly trying to acquire LVMH!

If they succeeded, it would be the largest acquisition in France this year—and possibly the biggest corporate merger in Europe.

As the intermediary, BNP Paribas stood to earn substantial interest and commission, while also establishing an outstanding reputation in this field. Future clients looking to acquire French companies would likely turn to BNP Paribas.

Fueled by excitement, Baptiste threw himself into the effort, especially after André made it clear: for every equity acquisition BNP Paribas completed, they could transfer the funds directly into their proprietary accounts for transaction payments. There was no need to use BNP Paribas' own money—just processing the transactions was enough. And for each completed acquisition, the bank would receive the corresponding commission immediately.

No upfront funding was required, but commissions would still flow in. Baptiste, with his extensive banking experience, had never encountered such a lucrative deal!

To maximize BNP Paribas' efforts, Milo went to great lengths. And BNP Paribas, as France's second-largest and the world's fourth-largest bank, demonstrated its formidable influence when fully mobilized. Their acquisition campaign was unstoppable.

Within just a week, most of the LVMH Group’s equity and soon-to-mature debt held by other banks were acquired.

BNP Paribas also pushed confidentiality to a level that even impressed Milo. Despite so much time having passed, neither Bernard Arnault nor anyone else at LVMH seemed aware of the developments.

This truly proved the power of financial incentives. With a 200% profit dangling before them, BNP Paribas eagerly charged ahead.

It was like comparing employees of a premium supermarket to those of a regular one. Was it because the former had higher moral standards? No—it was because they were paid more. The same logic applied to Milo's ability to motivate BNP Paribas.

By the end of November, through BNP Paribas, Milo had acquired 29.5% of LVMH Group shares and roughly 35 billion francs and $1 billion in commercial bonds set to mature within six months to two years.

The equity acquisitions carried an average 20% premium, costing approximately $2.5 billion. The bonds were acquired at face value, totaling around $1.8 billion based on current exchange rates. Adding the $62 million in commissions paid to BNP Paribas, Milo had spent $4.3 billion in less than half a month.

Indeed, conducting a financial blitzkrieg in business required substantial expenditure. But to Milo, the efficiency and results were worth every penny.

The first phase was a resounding success!

In the second phase, Milo planned to negotiate privately with the three major families—excluding Bernard Arnault, the largest shareholder and true controller of LVMH.

If Milo could secure shares from these families, he wouldn’t even need to resort to the controversial "debt-to-equity" strategy. He could surpass the 50% shareholding threshold and take full control of LVMH.

But if these French families resisted, Milo wouldn’t hesitate to play hardball. It would be a choice between debt-to-equity conversion or immediate repayment.

Considering Bernard Arnault’s aggressive acquisitions in recent years, it was unlikely LVMH could repay such a large debt quickly. Even if they managed, their liquidity would be entirely drained.

Thus, the outcome was straightforward: cooperate and Bernard Arnault would be finished. Smart families would take the money and leave. Stubborn ones could prepare for a long and difficult struggle.

This was the next phase: *"If I can’t have it, I’ll destroy it. Ruthlessly."*

(End of Chapter)