From 'Strategic Fit' to Synergy Evaluation in M&A Deals

Caspian Journal of Applied Sciences Research, 1(12):25-38, 2012

14 Pages Posted: 21 Oct 2012 Last revised: 3 Dec 2012

See all articles by Arabella Mocciaro Li Destri

Arabella Mocciaro Li Destri

University of Palermo - d/SEAS

Pasquale Massimo Picone

University of Bergamo - Department of Management, Economics and Quantitative Methods

Anna Minà

University of Catania, Italy

Date Written: 2012

Abstract

The aim of this paper is to grasp the processes underlying the genesis and assessment of synergies in M&A deals. We proceed to an in-depth scrutiny of the foundations of synergies using Porter’s model of the value chain. A discernment of the nature of synergies and the mode of their emergence is helpful to clarify to what extent and under which boundary conditions it is appropriate to apply the DCF or the real option techniques for evaluating each type of synergy. Combining both financial tools, the methodology suggested for evaluating the synergies is able to: evaluate projects of M&As, orient the selection of target firms and the definition of the premium of acquisition, and drive the integration processes.

Keywords: merger, acquisition, synergy, Porter’s value chain, evaluation

JEL Classification: G31, G32, G34, L21, M21

Suggested Citation

Mocciaro Li Destri, Arabella and Picone, Pasquale Massimo and Minà, Anna, From 'Strategic Fit' to Synergy Evaluation in M&A Deals (2012). Caspian Journal of Applied Sciences Research, 1(12):25-38, 2012 . Available at SSRN: https://ssrn.com/abstract=2164696

Arabella Mocciaro Li Destri

University of Palermo - d/SEAS ( email )

Viale delle Scienze, edificio 13
Palermo, 90124
Italy

Pasquale Massimo Picone (Contact Author)

University of Bergamo - Department of Management, Economics and Quantitative Methods ( email )

Salvecchio 19
Bergamo, 24129
Italy

Anna Minà

University of Catania, Italy ( email )

Corso Italia, 55
Catania, CT 95129
Italy

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