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National Research University Higher School of EconomicsStudent ThesesAnalysis and Evaluation of Synergistic Effect in M&A Deals

Student
Title
Supervisor
Faculty
Educational Programme
Final Grade
Year of Graduation
Yuliya Churkina
Analysis and Evaluation of Synergistic Effect in M&A Deals
Faculty of Economics
Bachelor’s programme
9
2014
Bachelor's Thesis on “Analysis and Evaluation of Synergistic Effect in M&A Deals” consists of 65 pages, includes 4 figures, 18 tables and 3 appendices, 47 literary sources were used for writing the current research. Statistical sources, official records of companies, electronic sources, databases, and also scientific papers and foreign publications are used as sources of data. Keywords: mergers and acquisitions, M&A, synergistic effect, evaluation, synergyThis research is devoted to the analysis and evaluation of synergy in mergers and acquisitions. It is aimed at creation and clarification of the understanding of what synergy is, in which cases it can be shown and what methods can be used to evaluate it.Mergers and acquisitions are a popular growth strategy, both for Russian and foreign companies, and the main motivation for making mergers and acquisitions is the synergy that occurs when the two companies merge, which makes evaluation of synergy particularly important in the study of this kind of deals. It should be noted that synergy does not always give a positive result, and there is also an inverse synergy. For this reason synergy assessment is a crucial step in the analysis of the effectiveness of the merger. As a result of evaluation the synergies have an effect on the cost of the transaction and a premium paid to the merger, which is yet another confirmation of the relevance and necessity of synergy evaluation.The aim of this work is to determine the most appropriate method of synergy evaluation.The object of this study is merge of the company Unilever and affiliate group of corporations "Kalina".The subject of research are synergies, which arise in mergers and acquisitions deals.In the first chapter “Theoretical aspects of mergers and acquisitions” the main provisions on mergers and acquisitions (M&A) are considered, as well as the most popular motives for mergers and types of mergers are studied. This chapter also reflects the specificity of the mergers and acquisitions in Russia.In the second chapter “Synergy in M&A deals” the scientific works of Russian and foreign authors, which describe the various classifications of synergies and studying causes of synergistic effects, are analysed. Also in this chapter methods to evaluate synergy and provides all the necessary formulas for practical research in the next chapter are considered.In the third chapter “Analysis and evaluation of synergies in the merger of Unilever and affiliate group of corporations “Kalina”” the synergies identified by analysing the characteristics of the companies are evaluated. According to the results of the analysis, 7 synergies were identified, most of which have an impact on cash flows of affiliate group of corporations “Kalina”. Evaluation of synergies can be made ​​in two ways: by individual assessment of each synergy and by business valuation of the combined businesses before and after the merger. The obtained results of the evaluations are different due to several factors: the closeness of internal company information, inability to assess qualitative synergy, uses of different discount rates.The results confirm the hypothesis that cannot be detected to identify the single correct way to evaluate synergy. The choice of method depends on the results of the analysis of synergies, and also the amount and type of identified synergies.

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