Synergy
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Financial synergy (or, simply, synergy) is a phenomenon that occurs when the whole is greater than the sum of its parts. When applied to mergers, a synergistic merger occurs when the post-merger earnings exceed the sum of the separate companies' premerger earnings.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Synergy. Occurs when the whole is greater than the sum of its parts. When applied to mergers, a synergistic merger occurs when the post-merger earnings exceed the sum of the separate companies' premerger earnings.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
