Lester Electronics and Shang-wa Electronics

Paper Summary:

This paper considers the case of Lester Electronics and its relationship to the supplier Shang-wa Electronics. The paper considers whether a deal between the two companies makes sense in the context of other business alternatives. The paper considers the players, the situation and the options and determines that a merger between the companies makes sense.

From the Paper:

"Lester Electronics, Inc., is a U.S.-based distributor of consumer and industrial electronic components, with annual revenues of $500 million. Since 1978, Lester has had a close partnership with Shang-wa Electronics, a Korean manufacturer of capacitors with $60 million in revenues. This partnership has consisted of yearly agreements for Lester to purchase a minimum of $1 million wholesale from Shang-wa, in return for rights to exclusivity. In recent months, informal discussion between the principals - Mr. Bernard Lester, CEO and founder of Lester, and Mr. John Lin, founder and CEO of Shang-wa - has involved the possibility of a $60 million joint venture in a yet-to-be-determined Asian country that would be designed to combine Lester's management expertise with Shang-wa's manufacturing efficiencies to produce components in the growing market for capacitors."

More papers on Lester Electronics and Shang-wa Electronics:

• Case Study # 129021 : "Lester Electronics-Shang-Wa Merger"
• Case Study # 114837 : "Lester Electronics Inc. (LEI)"
• Case Study # 114829 : "Lester Electronics"

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