Merge Countersignature Affirmation with airSlate SignNow

Merge countersignature affirmation

a lot of mergers and acquisitions don't work out so you might wonder about the motives for companies engaging in M&A and the biggest motive is synergies whenever you hear about some merger there definitely won't be talking about oh we're gonna expect these synergies 500 billion dollars in cost synergies and you might be wondering what this is so basically when you hear the word synergy think of it like this one plus one equals three or sometimes you hear two plus two equals five what that means is is that the combined firms right so firm a and firm B when you put them together the combination of the two firms is greater than the component parts independently now how can we get that the the sum is greater than the independent parts well it could be three different types of synergies a revenue synergy is somehow saying okay look by combining these two firms we're gonna somehow generate revenues that previously these two firms could not generate beforehand before the merger one way is to increase pricing power so that's if these two companies are competitors so if these two companies are competitors then buy them merging you basically have taken one competitor out of the game and so they might have a little bit more monopoly power they might have ability to increase prices because whereas before so you have firm a and you have firm B if firm a had increased prices before firm B might have said oh well we're gonna get all the business but now we're they're combined they raise prices and assuming there's no other competition or there's not much competition that can actually lead to more revenue there could also be cross selling opportunities there's a lot of different revenue synergies that could materialize but the most common synergy you're gonna hear about is cost any type of merger you're gonna hear about some way to generate cost savings a lot of time it has to do with reducing headcount which is unfortunately firing people so you will hear about like redundant roles redundant positions that can be eliminated if you think about it a simple way the two companies they each had a CEO prior to the merger but when we combine the firms we don't need two CEOs we just need one CEO that can run the combined firm so you can eliminate some positions and so there would be closet there's a lot of other cost savings that I'll talk about in a future video about financial synergies so financial synergy let me give an example this has to do with like lowering the cost of capital for the combined firm and so if firm a and firm B let's say that their cash flows are not perfectly correlated so a firm a maybe they do really well when when the economy's doing great and not so well during a recession and and firm B does a...