Cost Synergy

Cost Synergy

The financial benefit two companies may derive from a merger or acquisition. For example, two companies that merge may be able to produce more revenue than either one could independently by combining the most efficient processes each brings to the merger. Cost synergy may also refer to the cost reduction a merger brings about by eliminating or streamlining redundant processes. Cost synergy usually has a positive connotation; as a result, press releases and media reports often use the term to refer to layoffs following a merger that are intended to make the newly merged company more efficient.
References in periodicals archive ?
presented an update on the Agriculture Division financial performance and strategic progress during the 2018 Bank of America Merrill Lynch Global Agriculture & Chemicals Conference - providing a view of the Division's recent cost synergy achievements, as well as near-term product launches and longer term portfolio growth drivers.
The ratings would be affirmed if the risks balance or outweigh revenue and cost synergy opportunities.