Lester Electronics Benchmarking
University of Phoenix
MBA 540: Maximizing Shareholder Wealth
Lester Electronics, Inc. (LEI) Benchmarking
Lester Electronics, Inc. (LEI) faces a situation where the company must decide to whether partner with Shang-wa to establish a new capacitor manufacturing facility in a neighboring Asian country, acquire Shang-wa, or sell the firm to Aral Electronics, Inc., (University of Phoenix, 2004). The issue translates into an opportunity to increase revenues through sources of synergy revenue enhancement, cost reduction, lower taxes, and lower cost of capital (Ross, Westerfield, & Jaffe, 2005). Clearly, the firm must study the options in a timely manner in order to maximize profits.
Rio Tinto Company
Synergy from Acquisitions
Situation Facing the Company
Comalco, now officially known as Rio Tinto Aluminum, also faced a situation similar to that of LEI the opportunity to maximize shareholder's wealth as a result of a hostile bid to acquire a key company (Stevens, 2007). Rio is a leading international mining firm with headquarter offices in Melbourne, Australia and London, England and operations on all continents except Antarctica (Kennedy, 2001). The business' major products include aluminum, copper, diamonds, energy products, gold, industrial minerals (borates, titanium dioxide, salt and talc), and iron ore (Rio Tinto, 2007).
The United States aluminum producer Alcoa Inc. submitted a bid for $33 billion to acquire Alcan Inc., a Canadian firm in the innovative aluminum and packaging solutions business (Stevens, 2007). Alcoa is obviously one of Rio's competitors. Alcan owns valuable asset that translate to benefits or synergies to companies in the mining and metal production industry.
Response to the Issue
After the rejection of the hostile bid in May 2007, Tom Albanese, CEO of Rio Tinto, realized that Alcan would provide value to Rio's shareholders.... [continues]
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