Question

In: Finance

Discuss synergy value and provide examples. .

Discuss synergy value and provide examples.

.

Solutions

Expert Solution

Synergy value will mean that when two of the companies will be combining with each other they will be providing benefits to each other regarding various aspects of business so it will be leading to creation of value for the combined entity.

It is often said that in synergy "one plus one is not two but one plus one is 11" so when two companies are merging with each other It will lead to additional value creation through formation of a competitive advantage and gaining of additional market share and providing of the better products and earning Maximum benefits.

Examples of synergy value would be that when two companies are combining and they will be creating additional value for the combined firm as that will be increase in the market capitalisation and the market share along with the profits and that would be above the value of other firm so this will be leading to additional creation of value and this will be an example of synergy.


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