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. Think of closing duplicate functions, cross-selling to the buyer’s customers, or 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 →
Every chapter of M&A Foundations is free to read, including the full training share purchase agreement.
Related terms
Where this term lives
This term 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 →