.P. Morgan Chase & Co. – Financial Mix
Lester Electronics, Inc. markets industrial and consumer electronics parts, however the company has never marketed domestic-made parts outside of the U.S. Lester Electronics, Inc. has the opportunity to buy Shang-wa Electronics, which is a Korean manufacturer of capacitors, and has an exclusive distribution contract with Lester Electronics, Inc. (Scenario: Lester Electronics, Inc., 2008).
The acquisition will allow Lester Electronics, Inc. to have a broad financial or business mix that would maximize its capital structure. A financial or business mix is when an organization operates in various businesses (PerformanceTrading, n.d.).
J.P. Morgan Chase & Co., a financial services company, which realized its opportunity to become increase its capital structure through having an extensive financial mix in 2004 and did so by merging with Bank One Corp. After the merger the combined company had assets totaling $1.1 trillion, 2,300 branches in seventeen US states, and has a wide mixture of investments (J.P. Morgan, 2008). The merger made J.P. Morgan Chase & Co. the nation’s number 2 bank behind Citigroup (CNN, 2007) and made J.P. Morgan Chase & Co. a leader in credit cards, retail banking and lending, asset management, middle-market, treasury and securities services, investment banking, private-equity and private banking (J.P. Morgan, 2008).
According to Chairmen and CEOs of the both companies, “The combined firm will provide product and financial mix, size, customer base, distribution channels, scale, and stability in earnings that will achieve exceptional results and improve and maximize the shareholders wealth for many years to come” (J.P. Morgan, 2008).
The benefits of J.P. Morgan Chase & Co.’s business mix are seen in today’s weak economy. In January 2008, J.P. Morgan Chase & Co. reported that its portfolios of consumer home-equity and sub prime loan were worse than expected and announced write-downs in more than $18...