First Advisor

David Shankar

Date of Award

6-16-2021

Document Type

Thesis

Degree Name

Bachelor of Arts (B.A.) in Business: Finance and University Honors

Department

Business

Language

English

Subjects

Corporations -- Valuation, Consolidation and merger of corporations

DOI

10.15760/honors.1108

Abstract

Synergy is often used by management as justification to pay, and oftentimes overpay, for acquisitions. This paper explores the phenomenon of synergy being used as justification for overpayment in various M&A transactions, and the impact it has on value for shareholders. Current methods of valuation are compiled, summarized, and examined for potential areas of conflict, challenges with post merger integration are explored, and real world examples of improper integration and overpayment are examined. We find that the current methods of valuation leave room for error based on hubris and personal interest, that the realization of synergy is often much more challenging than forecasted, and that lack of synergy realization can come at a hefty price to company shareholders.

Rights

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Persistent Identifier

https://archives.pdx.edu/ds/psu/35751

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