1.

What Are Synergies, And Can You Provide A Few Examples?

Answer»

Synergies refer to cases where 2 + 2 = 5 (or 6, or 7…) in an acquisition. Basically, the buyer gets more value than out of an acquisition than what the financials would PREDICT.

There are 2 types: Revenue synergies and cost (or expense) synergies.

  • Revenue Synergies: The combined company can cross-sell products to new customers or up-sell new products to existing customers. It might also be able to expand into new geographies as a result of the deal.
  • Cost Synergies: The combined company can consolidate buildings and administrative staff and can LAY off redundant employees. It might also be able to shut down redundant STORES or LOCATIONS.

Synergies refer to cases where 2 + 2 = 5 (or 6, or 7…) in an acquisition. Basically, the buyer gets more value than out of an acquisition than what the financials would predict.

There are 2 types: Revenue synergies and cost (or expense) synergies.


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