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M&A success and synergies are regularly discussed in the practical literature, but synergies are typically treated as a static concept (how do you get them?) with little discussion of financial bet acquirers create in paying an up-front premium. We describe the importance of investor reactions, the nature of the challenge, and discuss synergies as a process with five rules of the road covering M&A strategy, diligence, culture, leakage, and validation and reporting. Potential acquirers must be better prepared before they commit these major capital investments, involving multiple stakeholders throughout the process of creating the value they are promising with M&A.

We report the important results of our 24-year study on acquirer performance, the persistence of investor reactions, and the role of the acquisition premium to support our position that synergies must be trackable and defendable before and after deal announcement. From our collective author experience of advising on many hundreds of synergy programs over the years, we distilled our experience based on the common lack of understanding of what is required by executives, and when, and what we have seen greatly improve the odds of success in achieving sufficient M&A synergies.

Major findings include: 1. Initial market reactions are good predictors of the future, most deals persist, positive or negative, and there is a big spread of returns between winners and losers with losers paying the highest premiums; 2. Premiums additions to target’s growth value and may require larger performance increases than acquirers expect; 3. Synergies are a dynamic process involving multiple stakeholders from becoming a prepared acquirer in M&A strategy, building an early synergy roadmap during diligence, understanding that culture and change issues launch at announcement and preparation must begin long before, anticipating leakage, and validating and reporting post-close.

Our study is original covering three waves of mergers over 24 years; we formalize the synergy challenge created by paying a premium with respect to the already existing growth expectations for the target; we make clear that ultimately validating synergies begins with M&A strategy and diligence through to the workings of an Integration Management Office, anticipating synergy leakage, and preparing employees for change.

The purpose of this article is to understand synergies in merger and acquisition (M&A) transactions.

Provides excerpts from the forthcoming book Synergies: The Art and Science of Making 2+2=5 by Bill Pursche.

The six most common mistakes that acquiring executives make are: defining synergies too narrowly or broadly; missing the window of opportunity; incorrect or insufficient use of incentives; not having the right people involved in synergy capture; mismatch between culture and systems; and using the wrong process.

This paper is a new approach to capturing the value of synergies in M&A, aimed at executives throughout the M&A process.

This study aims to identify which elements of the vending marketing mix are the main sources of competitive advantage for the industry, how they impact vending profitability, and what are their related synergistic effects.

A full factorial experiment was developed to determine the effect of eight marketing mix scenarios on the profitability of a new vending channel in a French university library and assess the synergistic effects among three elements of a marketing mix (i.e. product quality, payment system, internal location) identified in a focus group as new sources of industry competitive advantage.

Although the main effects of product quality and payment system were weak-to-modest and insignificant, their interaction effect significantly impacted the daily net profit of the vending channel and generated the highest net synergy. The results partially challenge the marketing synergy axiom as internal location separately had a stronger impact on profitability than product quality and higher-order interaction effects do not necessarily translate into higher synergistic effects.

This research was conducted in a real-life setting and has its limitations, which future researchers can overcome by extending the temporal, geographic and product scope of the study.

The distinction that we introduced between gross and net synergy allowed us to partially challenge the prevailing marketing mix assumption that synergy is always positive (i.e. that a vending retailer can achieve synergy by selecting a combination of marketing mix elements instead of relying on them separately). Moreover, by demonstrating that marketing synergy is not a uni- but a bi-dimensional concept, we provide vending retailers with a better methodological understanding of why they may have already fallen into the synergy trap and how to avoid it in the future.

The purpose of this paper is to develop a model considering synergy effect for prefabricated construction service combination selection.

This research defines prefabricated construction service as a service-led construction method that meets the specific requirements of clients. Based on network theory, the multi-dimensional collaborative relationships of the prefabricated construction inter-services are formulated. The synergy effect is quantitatively calculated through the linear weighting of the strengths of collaborative relationships. Further, a weighted synergy network (WSN) is developed, from which a service composition selection model considering the synergy effect is established. Then, a genetic algorithm is employed to implement the model.

The results showed that (1) when the number of prefabricated construction services is increased, the synergy effect of combination options is enhanced; (2) The finer-grained prefabricated construction services, the stronger the synergy effect of service combination; (3) Clients have heterogeneous preferences for collaborative relationships, and there are differences in the synergy effect of service combination.

The contribution of this research includes proposed a method to quantify the synergy effect from the perspective of collaborative relationships, explored the specific procedure for the prefabricated construction service combination selection under the service-led construction, and provided a reference for promoting the development in construction. Besides, the model proposed could be applied to prefabricated construction service composition selection with diverse research boundaries or client preferences by executing the same procedure.

A substantial minority of bidding firms disclose synergy forecasts during mergers and acquisitions (M&A). Using these hand‐collected synergy announcements, the purpose of this paper is to investigate synergy characteristics as well as explore their shareholder wealth effects within the European energy sector between 1998 and 2010.

The authors employ the market model event study methodology to infer short‐term wealth implications as well as the Fama French 3 Factor model to estimate long‐term effects.

The paper provides evidence for a positive correlation between the synergy size and combined bidder and target returns. However, the market discounts disclosed synergies to a degree which reveals that managers in the energy sector are likely to overestimate the actual, realizable size of the emerging synergies. Additionally, the results show that post merger long‐term returns of synergy disclosing firms remain significantly positive, indicating that projected synergies are continuously realized.

As the first study the paper shows that a synergy disclosure effect exists within the European market and hence demonstrates that synergy forecasts serve as an efficient instrument to decrease existing information asymmetries.

Marketers recognize that the internet is crucial in the lives of consumers; thus, they invest money on online advertisements. Using multiple online media primarily influences the message acceptance of consumers. The synergistic effect of online multimedia relies on form, content, and sources of information, and time. The paper aims to discuss these issues.

A model that reflects the influence of the characteristics of online multimedia on message response through message acceptance is established based on theories of information persuasion, encoding variability, and multiple-source assumption. Based on a survey of 411 online media users, the study applies partial least-squares regression to test the research model.

The results show that variety of forms, complementary of contents, diversity of sources, and time interval influence message response via message strength. Complementary of contents and diversity of sources affect message response via perceived credibility. Synergy type moderates the relationship between variety of forms and perceived credibility and between diversity of sources and perceived credibility.

The current study mainly tests the effect of these characteristics on message response and the moderating effect of synergy type. Future research can examine the effect of these characteristics on information seeking and consumption behavior and the moderating effect of the cognitive mode of consumers.

This study provides insight into the characteristics of synergy and contributes to the literature on integrated marketing communication. The results provide guidance for practitioners to effectively plan online multimedia practices.

This study explored the influence of the characteristics of online media synergy on message response through message acceptance. The study also discussed the moderating effect of the type of online multimedia synergy.

This paper explains the concept of cultural synergy and provides a contrast of societies that could be characterized as having high or low synergy, as well as organizational culture that reflects high and low synergy. Within organizations, the research insights reported here center on behaviors and practices that contribute to synergy and success among teams, particularly in terms of international projects. The concluding section describes people who are truly “professionals” in their attitude toward their career and work, and how they can mutually benefit from the practice of synergy. Real European leaders actively create a better future through synergistic efforts with fellow professionals. The knowledge work culture favors cooperation, alliances, and partnership, not excessive individualist actions and competition. This trend is evident, as well as necessary, in corporations and industries, in government and academic institutions, in non‐profit agencies and unions, in trade and professional associations of all types. In an information or knowledge society, collaboration in sharing ideas and insights is the key to survival, problem solving, and growth. But high synergy behavior must be cultivated in personnel, so we need to use research findings, such as those outlined in this paper, to facilitate teamwork and ensure professional synergy. In addition to fostering such learning in our formal education and training systems, we also should take advantage of the increasing capabilities offered to us for both personal and electronic networking. Contemporary global leaders, then, seek to be effective bridge builders between the cultural realities or worlds of both past and future. Cultivating a synergistic mind‐set accelerates this process.

The purpose of this paper is to propose a theoretical framework for renewable energy (RE) technology commercialization and partnership synergy. The interrelations/influences between external/internal factors, stakeholders’ partnership synergy, and resources in the form of dynamic capabilities and implementation mechanisms are used in this framework to explore the path toward overcoming non-technical barriers for RE technologies commercialization success.

Prior relevant research/literature is reviewed to derive the proposed theoretical framework constructs, while insight information on relationship between them is gained through case study methodology. The results of four case studies along with 16 validity/checkpoint interviews were used to support/reject 25 propositions linking the constructs.

The findings of the study supported 24 out of 25 propositions representing these relations, whereas one was rejected. The framework suggests that partnership synergy, if achieved, produces a unique internal and external resource combination that will result in successful technology commercialization.

This study is limited to RE technologies and did not focus individually on non-technical barriers. Future research may extend into other industries and explore the impact of partnership synergy on each non-technical barrier of technology commercialization.

Due to absence of economic theory of synergy there is a gap in academic literature regarding partnership between stakeholders of innovative technologies, the level of its synergy and their relation to successful commercialization. The study attempts to fill this gap to some extent through the produced theoretical framework, which might also help a broad array of RE projects’ participants maximize the returns by realizing full advantage of collaboration with other stakeholders.

The purpose of this paper is to advance a conceptual comprehensive framework to analyze synergy management pitfalls in mergers and acquisitions (M & As). The framework highlights the main dimensions of synergy management, the most relevant synergy pitfalls and the ways to overcome them.

A greater recognition of synergy management literature in M & As is developed. A framework is provided integrating the compatible elements of previous broad areas of research and the main findings of studies on several topics related to synergy.

Prior literature has suggested that synergy is an important motivation of M & As, has tended to be overestimated and has been difficult to achieve. Specifically, there are three relevant synergy pitfalls: the “mirage,” a tendency to overestimate synergy potential, the “gravity hill,” the underestimation of the difficulties in synergy realization and “amnesia,” a dangerous lack of attention to the realization of synergy. An effective synergy management requires an analysis of five dimensions: the steps of the M & A process, the several values of synergy, the forbidding effects of poor synergy management, the potential causes of synergy inflation and the selection of solutions to synergy pitfalls.

The comprehensive framework suggests insights and guidelines to help managers to overcome pitfalls in synergy management. Managers will learn the following lessons: “when” pitfalls should embrace synergy management; “where” pitfalls may occur; “why” pitfalls may occur; “what” consequences can result in a value of “realized synergy” lower than the “expected synergy”; and “how” actions, tools and behaviors can overcome hidden dangers in synergy management.

The study changes the focus from a single, generic synergy trap to three more analytical, useful synergy pitfalls: the mirage, the gravity hill and the amnesia. By shedding light on synergy management pitfalls, this paper enriches M & A literature and enhance practical solutions to reduce pitfalls in synergy decision making.

Discusses how interrelationships can be developed for synergy. Also focuses on horizontal strategy as a way to achieve competitive advantage. Organizational context can determine a firm’s motivation and ability to develop interrelationships that result in overall competitive advantage. Corporate strategy must move beyond the idea that the primary way of creating synergy is the combination of related businesses (by buying and selling businesses). Corporate strategy must focus on creating value that is independent of business unit value. This means developing horizontal strategies that have the objective of coordinating activities and developing programs that encourage the sharing of resources and skills. An understanding of the horizontal organization helps to emphasize that organizational structure and processes are significant in developing interrelationships with the potential to reach the goals of synergy and competitive advantage.