WPG Holdings: Saving the Industry

Case Solution

Katherine Xin, Jin Zhong
China Europe International Business School ()

This case tells the story of Taiwanese electronic component distributors in the early 2000s who innovatively sought horizontal consolidation amid lack of profitability and a battered industrial climate due to fierce competition. As a result, these companies had to face enormous challenges to effectively manage a post-merger organization. Specifically, it explains the background to the strategic marriage between WPI Group, Taiwan’s leading electronic components distributor, and SAC, the third-largest player in the same industry. They were merged through a share swap agreement under the umbrella of the holding company WPG Holdings. The new company is the result of an innovative industrial holding model that emerged from the alliance and is a pioneer for the regional industry. For WPG inaugural president Simon Huang, managing such a complex organization would be one of the biggest challenges of his career.

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