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Synergy
Synergy
More technical
Synergy is ability of merged company to
definition:
generate higher shareholders wealth
than the standalone entities.
Increased revenues may result
Increased market (monopoly) power
from:
Better or more efficient marketing
efforts
Strategic benefits such as entry into new
Marketing
synergy
Financial
Tax synergy
synergy
1. • First, we value the firms involved in the merger
independently, by discounting expected cash flows
to each firm at the weighted average cost of capital
for that firm.
countries.
Four billion times a day, P&G brands touch the lives of people
around the world
Value of 29,470
Gillette
The value of the combined firm (P&G + Gillette), with
no synergy, should be the sum of the values of the
firms valued independently. Therefore , add the
value of P&G to the value of Gillette to arrive at
the value of the combined firm:
203
1
Biased Evaluation
Process
Managerial
Hubris
Failure to plan for
synergy
http://money.cnn.com/2005/01/28/news/fortune500/pg_gillette
/
people.stern.nyu.edu/adamodar/pdfiles/papers/synergy.p
df
http://knowledge.wharton.upenn.edu/article.cfm?articleid=113
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nb.vse.cz/~pichanic/cesp363/syner
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