Valuing synergy: When a risk-based approach works

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Abstract: Valuing synergies is a challenge, given the substantial uncertainty in many cases over whether they’ll be achieved. This brief article discusses a recent study that demonstrates a trend toward valuing synergies separately in light of the inherent risks. The article points out that, while easily achieved cost synergies might not require a separate valuation, revenue synergies might need to be treated separately.