A proposed acquisition is most apt to create synergy by:
A) decreasing the market power of the combined firm.
B) disbanding the distribution network of the combined firm.
C) eliminating any strategic advantages of the target firm.
D) increasing the utilization of the acquiring firm's assets.
E) increasing the overhead costs.

Question

Quizplus · Accepted Answer

Synergy is created when the combined value of two firms is greater than the sum of their individual parts. In this case, increasing the utilization of the acquiring firm's assets would lead to increased efficiency and productivity, resulting in cost savings and increased revenue. This would create synergy as the combined firm would be more profitable than the two firms separately.

A Proposed Acquisition Is Most Apt to Create Synergy By