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Gap Analysis: Lester Electronics
Lester Electronics Inc (LEI) is a public company that is traded on the NASDAQ market and distributes industrial electronics parts. The company currently makes $500 million yearly in revenues, markets its products to original small and medium-sized equipment manufacturers, retail facilities, and small local distributors in the Americas and Europe. The company?s largest market is in North America. Lester Electronics has an exclusive agreement with Shang-wa for capacitors.
Shang-wa Electronics is a Korean-based capacitor manufacture that supplies capacitors to LEI for the U.S. market based on the conditions stipulated under a 35 year annual agreement. Lester Electronics and Shang-wa have been having financial difficulties, and are facing hostile takeovers from Transnational Electronics Corporation (TEC) and Avral Electronics. These two companies that are bidding for the takeovers have been strong financially, and are seeking to establish their presence and explore external growth opportunities (University of Phoenix, 2007).
Lester Electronics and Shan-wa have begun to explore a merger between the two companies. The merger is an alternative to a take over from an outside electronics company. LEI and Shang-Wa have a good business relationship and value their respective companies and the employees that work for them. The two companies are going to analyze the results of a merger on shareholder wealth for each company and how to maximize shareholder wealth through a merger or acquisition.
Situation Analysis
Issue and Opportunity Identification
Lester Electronics Inc has several issues and opportunities associated with ...