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How will you differentiate the value of control from value of synergy?

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Question added by GOHAR AYAZ
Date Posted: 2014/05/26
Rehan Qureshi
by Rehan Qureshi , Financial Consultant , Self Employeed

Definition of 'Synergy'

The concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts. Synergy is a term that is most commonly used in the context of mergers and acquisitions. Synergy, or the potential financial benefit achieved through the combining of companies, is often a driving force behind a merger. Shareholders will benefit if a company's post-merger share price increases due to the synergistic effect of the deal. The expected synergy achieved through the merger can be attributed to various factors, such as increased revenues, combined talent and technology, or cost reduction.

 

Control Value:

The value of shares in a firm when the number of shares available is sufficient to control the firm. If one person or a group owns60% of a firm's outstanding stock, the shares in the controlling60% are worth more on a per-share basis than the remaining40% of outstanding shares.

Rashad Moursi
by Rashad Moursi , Financial and Administrative Officer & international Business Transformer, Hotel Owner Reprs. , Investment and financial

Dear Goher, thank you for choosing my to answer to your question,

Value of Control, the value of control specifies how much it is worth to control a variable. In its simplest form, it is the change in value of a decision network where a random variable is replaced by a decision variable, While Value of Synergy, the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts.

 

 

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