Synergy happens when the value of two businesses brought together is greater than the sum of the value of the two individual businesses. 1+1 > 2
Sources of Synergy Benefits
- Cost Savings
- Eliminate duplicated functions and services
- Better deals from suppliers
- Higher productivity and efficiency from shared assets
- Revenues
- Cross-selling to customers to both businesses
- Access to new distribution
- Brand extensions
- New geographic markets opened up