M&A Foundations · glossary
The extra value a buyer hopes to create by combining businesses — shared costs, cross-selling, better purchasing power. A negotiation staple: buyers try not to pay the seller for synergies the buyer itself will create; sellers price them in anyway. Chapter 8
Explained in Chapter 8, Valuation: How Businesses Are Priced, of M&A Foundations.
Synergies are the extra value a particular buyer can create from the target that the target cannot create alone: closing duplicate functions, cross-selling to the buyer’s customers, moving the target’s volumes onto the buyer’s cheaper infrastructure. They explain a puzzle you will meet constantly — how a buyer can rationally pay more than any standalone valuation supports.Read Chapter 8, Valuation: How Businesses Are Priced →
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Every chapter of M&A Foundations is free to read, including the full training share purchase agreement. It is part of one complete fictional deal, with every document attached and a test after every chapter. Open M&A Foundations → · All terms A–Z →