Mergers and acquisitions invariably is an important and effective growth approach, but they also can destroy value if the procuring company overpays for the point. The price of an acquisition should be based on the associated fee savings and revenue power generators (synergy value) that is created by combining both of them companies.

The value of an pay for can be quite a lot greater than the total purchase price, when you add up the EBITDA coming from both parties. This can be called accommodement.

The value of mergers and purchases has exploded over the last 30 years, exceeding $12 trillion in transactions announced. The game has paled in comparison to the legendary merger odio of the eighties, but it is still a highly good strategy for companies looking for new market segments and functions.