📖 Business terms

Synergies

Extra value created by combining two companies.

Cost synergies come from removing duplication (one head office, shared factories). Revenue synergies come from selling more together (cross-selling, bigger reach).

Cost synergies are easier to deliver; revenue synergies are often over-promised.

How to break it down

Synergies

Cost: shared ops, buying power

Revenue: cross-sell, reach

🧮 Example

Two regional dairies merge and close one of two plants in the same city → ₹30 crore saved a year.

🎯 Interview tip

Discount revenue synergies in your answer — it shows realism.

Used in

M&A cases

Learn next

M&A framework

Should we buy this company?

Economies of scale

Getting cheaper per unit as you get bigger.

Net present value (NPV)

Future cash, translated into today's money.

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