When companies merge and the combined unit's performance is better than the sum of the performances of the combining companies, the effect is called a(n):
A) positive merger attribute.
B) consolidation merger.
C) coalition of management skills.
D) synergy.

Question

Quizplus · Accepted Answer

When companies merge and the combined unit's performance is better than the sum of the performances of the individual companies, it is known as synergy. Synergy can occur due to various reasons, such as combining complementary skills, increased market power, or cost-saving measures. It results in an overall positive effect on the performance of the combined unit. The other options, such as positive merger attribute, consolidation merger, and coalition of management skills, do not accurately describe the effect of a successful merger.

When Companies Merge and the Combined Unit's Performance Is Better