MBA 540: Should LEI purchase a minority interest? Why?
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I need the following questions answered 125 words each: (Attached is the scenario for Lester Ele.)
How can any public company justify purchasing a minority interest in another public company?
Should Lester Electronics consider purchasing a minority interest in another company?
Explain why Lester should or should not consider this strategy.
What are the most important metrics to use when evaluating the results of an acquisition?
How long after completing the acquisition should the acquiring company wait before completing its evaluation of the deal?
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Solution Summary
This solution discusses purchasing a minority interest in another public company, along with decisions and things to consider when evaluating the results of an acquisition. It is about 927 words including references.
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Good evening and thank you for your request!
I have answered your 5 questions below. 4 out of the 5 are well above the 125 word requirement. The 1 that is shy of the 125 words you need for your assignment is the metrics question. That one tended to be more of a listed answer in our Discussion Questions (when I took this particular class).
Thanks and Good Luck!
Aaron
OTA #105647
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>> How can any public company justify purchasing a minority interest in another public company?
(I will answer this from the Lester Electronics scenario, rather than from a more 'generic' approach)
First off, this opportunity must be seized- not just for the simple fact that LEI will lose so much business from the partnership, but also because of the long-term gains that could be realized by having a stake in what Shang-Wa controls. Not everything that Shang-Wa does revolves around LEI. LEI could grasp on to markets and technologies it has yet to investigate, all because of the unique relationship with Shang-Wa.
Mr. Lester also needs to continually seek out new avenues for technology, partnerships and advancements. Additional mergers, acquisitions or minority interest purchases in well-ran business will allow LEI to expand its portfolio and position itself for long-term success.
When looking at any type of business merger, acquisition or venture, it is crucial to evaluate the financial statements of the business in ...
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