BUSINESS FINANCE II (İŞLETME FİNANSI II) - (İNGİLİZCE) Dersi Mergers and Acquisitions soru detayı:
SORU:
What effects does synergy have as motivation for M&AS?
CEVAP: A Dictionary of Business and Management (2016) defines synergy as the added value created by joining two separate firms, enabling a greater return to be achieved than by their individual contributions as separate entities; i.e. the overall return is greater than the sum of its parts. The synergy is usually anticipated and analysed during merger or takeover activities; for example, one firm’s strength in marketing would be complementary to the other firm’s versatility in new product development.
Synergetic benefits from M&A may be in forms of economies of scale, and economies of scope. Benefits from economies of scale involve cost reductions because of producing in large scales or sharing business services. It may be lower cost of labor, lower cost of raw meterials, or lower cost of capital. Benefits are the outcomes of horizontal integration. On the other hand, benefits from economies of scope stem from combining the business with suppliers or customers. Benefits are the outcomes of vertical integration. You may find detailed information on economies of scale and economies of scope in economics books.
Besides economies of scale and economies of scope, synergy may also stem from effectuation between ideas, cooperation, and knowledge sharing. The employees of two combining business entities may bring their background and experiences together to create value, which is bigger than anticipated.
A Dictionary of Business and Management (2016) defines synergy as the added value created by joining two separate firms, enabling a greater return to be achieved than by their individual contributions as separate entities; i.e. the overall return is greater than the sum of its parts. The synergy is usually anticipated and analysed during merger or takeover activities; for example, one firm’s strength in marketing would be complementary to the other firm’s versatility in new product development.
Synergetic benefits from M&A may be in forms of economies of scale, and economies of scope. Benefits from economies of scale involve cost reductions because of producing in large scales or sharing business services. It may be lower cost of labor, lower cost of raw meterials, or lower cost of capital. Benefits are the outcomes of horizontal integration. On the other hand, benefits from economies of scope stem from combining the business with suppliers or customers. Benefits are the outcomes of vertical integration. You may find detailed information on economies of scale and economies of scope in economics books.
Besides economies of scale and economies of scope, synergy may also stem from effectuation between ideas, cooperation, and knowledge sharing. The employees of two combining business entities may bring their background and experiences together to create value, which is bigger than anticipated.