Lester Electronics is a consumer and electronics parts master distributor that commercializes its products to original equipment manufacturers. For more years, Shang-wa Company has had an exclusive supply agreement with Lester electronics. Now, the CEO of Shang-wa is regard to retire and has no formal succession plans for the company?s management. At the same time, Shang-wa is world act for a coup by Transnational Electronics Corporation (TEC). Lester Electronics and Shang-wa Electronics are both sick over the take over possibility. Lester is set to lose 43% of their revenues if they lose Shang-wa as a supplier. Lester Electronics is also being pursued for a possible takeover by Avral Electronics. After a great deal analysis, both Lester and Shang-wa agree that a merger between the cardinal companies would be the best solution to maintain their relations and bout off takeover attempts by the two other companies (University of Phoenix, 2007).
Lester believes that a merger between the two companies would be the best guidance to increase their shareholder?s wealth. By merging, Lester will instantaneously have a global presence and should increase their market standing. However, there are several issues that Lester will have to book of facts as a result of the merger.
Situation AnalysisIssue and Opportunity IdentificationLEI conclusion is to expand beyond its current core.
The environment currently adjoin their market creates a frame of challenges ranging from hostile takeovers to increased competition. In their current situation, if LEI does nothing they will lose upward of 45% of their expected revenue over the next louvre years. This lost would result from Shang-wa Electronics merging with Transnational Electronics Corporation. Additionally, LEI is being looked at by Avral Electronics, S. A., a company that manufactures equipment and components, for a merger.
In evaluating the current issues that LEI faces, they have found a number of options...
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