"Norman attended a foreign investors' reception at the Kremlin last week and met with Yeltsin. He mentioned your recent activities in Russia selecting girls."
Du Mei Cape Manor.
The time was Friday, January 28th.
Simon and Anthony Johnston had just sat down in the guest area with a superb sea view at the Shell Villa when Anthony brought this up.
Janet personally brought coffee for her husband and brother. She initially planned to sit next to Simon but gave him a look that said, "My brother's got my back, so you better watch out," before walking away.
Simon felt no guilt and wasn't surprised that Yeltsin knew about his recruitment of maids in Russia. The lean camel is still bigger than a horse; if Russia, which inherited the KGB intelligence system from the Soviet Union, couldn't detect this, it might as well be doomed.
Simon also knew that he had been a focal point for governments worldwide, both openly and secretly, for a long time.
After all, a self-made billionaire with a net worth of over $100 billion was unique.
Taking a sip of the coffee Janet brought over, Simon asked with a smile, "What did Yeltsin say?"
Anthony didn't intend to scold his brother-in-law. For such an exceptional individual, it was hard to maintain the demeanor of an older brother: "Yeltsin said Russian girls are very talented, and your selection criteria are too strict. Also, he invited you to visit Moscow when you have the chance."
"Maybe someday. I'm actually quite interested in seeing Moscow."
Anthony nodded and couldn't help but ask, "Why select so many girls?"
Simon didn't hide his intentions: "I plan to train some maids for the household. You know, ones trained by us are more reliable."
Anthony asked, "Like Sophia Fisi, Alice Ferguson, and Claire Gain?"
Sophia, who managed the Melisandre company, Alice, who was responsible for Igret's e-commerce business, and Claire, who founded Tinkobel, were all considered maids from the Westeros family.
While the media rarely discussed this openly, the elite circles were very interested in the exceptionally talented women around Westeros, making countless women eager to get close to Simon.
Sophia Fisi and others were chosen by Simon after their skills were well developed. Now, his brother-in-law planned to train them from scratch. Anthony thought about his brother Norman discussing this with him and Yeltsin's comments about Simon's strict criteria, confirming that these girls would only become more exceptional.
Anthony almost wanted to ask Simon for one or two to use as assistants but refrained, thinking it inappropriate as the older brother-in-law.
So he changed the topic: "Speaking of Russia, Dad scolded Norman last Christmas. He said your warning about Mikhail Fridman not showing too much political ambition was correct and threatened to break Norman's legs if he got too close to Yeltsin."
In recent years, Russia's collapse created many oligarchs, who seized assets in various fields during the privatization process.
The new Russian oligarchs didn't have much capital of their own and relied on overseas capital for support. The Westeros system didn't miss out on this feast either.
Simon chose Mikhail Fridman, one of the seven major oligarchs of the 1990s in the original timeline, as the Westeros system's representative in Russia. Fridman was the only one of the old seven oligarchs to "survive" when the great emperor came to power.
This was not a coincidence.
Mikhail Fridman was a businessman who was very good at assessing the situation and avoiding political involvement. While this made him the weakest among the old seven oligarchs, he earned the emperor's approval when the other oligarchs who meddled in politics were taken down.
Since the Soviet Union's collapse in 1991, the Westeros system had reached out to Fridman, funding the establishment of Alfa Group, with over $500 million invested in recent years. This amount was insignificant to the Westeros system but could buy a lot in Russia.
Though Fridman was not politically ambitious, Simon wasn't sure if he would remain so, thus repeatedly reminding him.
Hearing Anthony's tone, Simon asked, "Tony, you don't understand either?"
"Russia has always been Norman's responsibility. I wasn't there that day, and Dad didn't explain it to me later." Anthony shook his head. "I just think this isn't your usual strategy?"
Simon had always heavily invested in North America and Australia politically. Anthony knew the Westeros system secretly supported President Clinton. Therefore, Russia, still in turmoil, should be an ideal platform for political maneuvering.
Simon organized his thoughts and explained, "Russia is different from us. Although it adopted a federal system, its century-long political genetics won't change. This makes Russia more suitable for strongman politics. I don't have high hopes for Yeltsin; he's more of an opportunist than a capable politician."
Anthony thought for a moment and said, "So, you think another strong leader might emerge in Russia?"
Simon nodded. "There's a high chance. Once such a leader appears, they won't tolerate oligarchs meddling in politics. That's when the oligarchs will be purged. So, in Russia, we should stick to business and avoid politics."
Anthony understood Simon's strategy: "But avoiding politics entirely is impossible, right?"
"Of course not. We support Yeltsin's election and expand our political network as much as possible without interfering or manipulating. I understand this might prevent us from fully integrating into Moscow's core circle, and Fridman's achievements might lag behind other oligarchs, but it's a long-term strategy."
Anthony nodded: "I'll explain your views to Dad."
Simon was puzzled: "Hmm?"
Anthony laughed: "If Dad didn't explain it to me, he probably didn't understand it himself. He likely warned Norman out of trust in you."
Simon laughed too.
Given the old man's personality, even if he didn't understand, he wouldn't ask Simon directly. He was straightforward with his children.
Simon also realized his small oversight. While reminding Mikhail Fridman, he forgot to explain his intentions to Norman Johnston.
Simon, with memories of two lifetimes and a life lived on the other side of the ocean, easily grasped these nuances.
Compared to him, Raymond Johnston, living in the open political environment of Australia, was used to influencing the government to protect his family's interests. Despite his experience, he might not easily understand the thinking of politicians in a different system, let alone foresee the future as Simon could.
Ultimately, Simon was an outlier.
Wisdom comes from understanding the world.
A person's life is finite, and even the most shrewd and experienced individuals can't know everything. They inevitably have their limitations in knowledge and thinking.
Simon, however, was akin to someone with the experience of living multiple lifetimes, with a unique foresight into the future.
As they chatted, Anthony brought up another topic: "The Westeros office in Russia is set up in St. Petersburg, and VimpelCom's headquarters is also there. Is there a particular reason for this?"
Simon hadn't expected Anthony to notice this detail.
The answer was affirmative.
Someone was currently serving as an assistant to the mayor in St. Petersburg. The core of Moscow's leadership mostly came from St. Petersburg. Perhaps some things would change in this timeline, but building good relations now wouldn't hurt. If the Westeros system could provide support at crucial moments in the future, the returns would be substantial.
But this couldn't be frankly explained to Anthony.
Fortunately, the question was easy to answer.
"The Westeros investments in Russia are mainly in telecommunications. St. Petersburg is close to Helsinki, both cities on the Gulf of Finland, less than 300 kilometers apart, making it convenient for Nokia to cooperate with Russia."
Anthony nodded, finding Simon's explanation reasonable.
Westeros's Verizon Telecom and Mikhail Fridman's Alfa Group established VimpelCom two years ago, registered in Amsterdam, a European tax haven, primarily operating in mobile communications in Russia, including internet services. However, given Russia's low PC penetration rate, the focus remained on mobile communications for the short term.
Nokia, part of the Westeros system, was naturally VimpelCom's sole supplier of base stations and terminal equipment.
Verizon Telecom provided technical and operational support, and Nokia supplied equipment. The two companies' strong partnership made VimpelCom Russia's largest mobile operator, with substantial user bases in Moscow and St. Petersburg, and they were expanding into Eastern European countries like Ukraine, the Czech Republic, and Poland.
Ownership-wise, Verizon Telecom and Alfa Group each held 50%, with Verizon managing operations.
Though it seemed neither had control, Westeros also owned 15% of Alfa Group, and the Johnston family another 15%. Mikhail Fridman held 60% nominally, but only 30% was truly his, with the remaining 40% held on behalf of others.
Ignoring Alfa Group's secret ownership structure, through indirect holdings, the Westeros system effectively had absolute control over VimpelCom. Similarly, using this indirect model, the Johnston family absolutely controlled Alfa Group's oil and mining assets.
According to the Johnston family's estimates, the oil and mining assets acquired by Alfa Group at extremely low prices were worth over $5 billion, with acquisition costs under $300 million.
Entering the Russian telecommunications market was simpler than Simon imagined, almost "reckless."
Of course, the recklessness wasn't on the Westeros system's part.
Having observed an empire's collapse under the hands of ambitious men and opportunists for years, Simon felt a deep sense of pity.
He felt like a crocodile.
If not for the Westeros system's groundwork in Eastern Europe and Russia, this selection process for maids wouldn't have gone so smoothly. The personnel were already in place, and Simon only needed to issue orders. Otherwise, if another nouveau riche without the
underlying strength tried this, they would likely be devoured by local players.
Simon understood early on that to shed labels like "nouveau riche" or "fat sheep," the key was to convert capital into genuine influence.
From 1986 to now, over seven years, Simon not only amassed over $100 billion in personal assets but also transformed this wealth into pervasive influence across media, fashion, entertainment, politics, finance, telecommunications, and technology.
Beyond personal wealth, this conversion of strength was what Simon was most pleased with.
Anthony Johnston wasn't in Los Angeles by chance.
Since mid-last year, preparations began for the acquisition of BHP, an Australian mining giant. Official negotiations started in August, agreements were reached in October, and after over three months of government review, this Wednesday, the Australian authorities formally approved the acquisition by a consortium led by Johnston Holdings.
This acquisition marked further integration between the Johnston family and the Westeros system.
With approval granted, the next step was payment.
Anthony was in North America to handle this.
Due to Australia's economic downturn and the devaluation of the Australian dollar, BHP's final acquisition price was 21.6 billion AUD, equivalent to 15.1 billion USD, lower than the initial estimate of 16-17 billion USD.
However, Johnston Holdings' mining assets in the merger were valued at 3.9 billion AUD, or 2.8 billion USD, also lower than the initial 3 billion USD estimate.
The total transaction value was 25.5 billion AUD, or 17.9 billion USD.
Globally, this transaction was second only to the $33 billion Reynolds Nabisco deal in the late 1980s and the $18 billion Philip Morris-Kraft Foods merger. Unlike the previous two, which created huge debt from leveraged buyouts, Johnston Holdings and its allies used their own funds, generating no additional debt, making it even more significant.
Since the agreement was reached in October, the acquisition has drawn significant media attention.
Initially, Johnston Holdings aimed for 35% of the new company. However, due to Australia's economic decline and the steel industry's slump, external capital like Morgan Stanley reduced their investment, requiring more funding from Johnston Holdings and Westeros.
As a result, Johnston Holdings integrated its mining assets into the new company, translating to a 15.6% stake.
The 15.1 billion USD BHP transaction price remained in the initial cash and stock payment mode, with 8 billion USD in cash and 7.1 billion USD in stock.
The new company would remain publicly traded.
Initially, Johnston Holdings and Westeros each needed to contribute 1.5 billion USD, with other shareholders and external capital covering the rest. Now, with reduced external investment, Johnston and Westeros had to pay 4 billion USD.
For Simon, 4 billion USD wasn't much, but it was a stretch for the Johnston family, who needed loans even for the initial 1.5 billion USD. After negotiations, Johnston's contribution remained the same, while Westeros's increased to 2.5 billion USD.
This meant that Westeros's stake in the new company would reach 13.9%, a significant proportion for a major mining group. Originally, BHP, as a publicly held company, had few shareholders with over 5% stakes.
The Johnston family's 1.5 billion USD and other shareholders' 1 billion USD also earned them a 13.9% stake.
Adding Johnston's original 15.6%, Johnston Holdings' total stake would be 43.4%, nearing absolute control.
To avoid monopolistic control of a core national industry and market manipulation, the Australian government's review lasted over three months, barely approving the acquisition.
This was fortunate.
The World Trade Organization (WTO) was set to formally establish in April.
If delayed further, involving a core resource industry like iron ore and a $17.9 billion transaction, approval from WTO member countries would be required, prolonging the process.
With this merger, Johnston Holdings could advance Simon's vision of creating a conglomerate akin to the BHP Billiton Group. The next step was lobbying the Australian government to loosen antitrust regulations for the iron ore industry.
Heavy capital, strict regulation, and cyclical nature are major drawbacks of the energy and mining sectors. If not for the Westeros system's substantial capital and a trustworthy partner like the Johnston family, Simon wouldn't venture into this field.
However, investing in capital-intensive sectors like energy and mining was inevitable for the Westeros system. Given its current scale, it couldn't focus on small investments of a few million dollars.
Roughly estimated, Danilis Group's net profit last year was 2.27 billion USD.
Verizon Telecom, Melisandre Company, Cersei Capital, and other Westeros core enterprises, though not as profitable as Danilis Entertainment, also generated significant profits. Even loss-making companies like Igret and AOL, with increased revenue and external equity and debt financing, no longer required substantial investment from Westeros.
Thus, the entire Westeros system would continuously generate more and more surplus funds.
Simon spent lavishly worldwide, buying luxury properties, vast undeveloped lands, training maids at princess-level costs, gifting expensive items to his companions, which some deemed outrageously extravagant. Yet, his personal expenses were less than 500 million USD last year, equivalent to Verizon's annual profit, without even touching Danilis Entertainment, Cersei Capital, and Melisandre.
So, what to do with the vast cash influx of the entire Westeros system each year?
Of course, invest it!
Otherwise, inflation would erode the value of these funds.
Buffett's purchase of billions in Apple stock was seen as unwise by some, but they overlooked that with a cash reserve in the hundreds of billions and a steady influx, Berkshire Hathaway had few targets but a trillion-dollar giant like Apple.
In the early '90s, the dollar was strong, and most corporate giants had market caps of only $20-30 billion. Thus, the Westeros system, with tens of billions in annual income, was already facing Berkshire's future dilemma.
After completing the layout in familiar fields like entertainment, technology, and fashion, Westeros's expansion could only venture into new, unfamiliar areas.
Moreover, seeking influence through investments meant limited options.
For instance, Simon wanted to buy Boeing, now valued at around 20 billion USD. However, when Westeros and Cersei Capital's funds held nearly 10% of Boeing, the DOJ issued a notice asking Westeros to explain its intentions.
After negotiations, though Westeros wasn't banned from buying more Boeing stock, the DOJ limited it to one board seat. It was clear that any attempt to fully acquire Boeing would be decisively blocked.
_________________________
[Check out my Patreon for +200 additional chapters in all my fanfics! $5 for all!!]
[w w w . p a t r e o n .com / INNIT]
[+50 PowerStones = +1 Chapter]