Posted: March 9th, 2023
Read the assigned article, “Are You Paying Too Much for That Acquisition?” by Eccles, Lanes, and Wilson, from Harvard Business Review (1999).
In the textbook, complete the following problems.
Using information from “Are You Paying Too Much for That Acquisition?” address the following with a minimum of 500 words.
Eccles, R. G., Lanes, K. L., & Wilson, T. C. (1999). Are You Paying Too Much for That Acquisition? Harvard Business Review, 77(4), 136–146.
DePamphilis, D. (2015). Mergers, acquisitions, and other restructuring activities (8th ed.). New York, NY: Elsevier Academic Press. ISBN-13: 9780128013908
SOLUTION
The most underestimated component of synergy value is likely to be cost synergies. Cost synergies are often overestimated due to assumptions about the ease of integrating the two companies and the ability to eliminate redundancies. In practice, it can be difficult to achieve the anticipated cost savings, and integration can take longer and be more complex than expected.
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