Synergy valuation and synergy structure analysis for internal M&A deals in Russia in 2006-2014

M&A decisions are vital for long-term development of emerging market companies. Existing research pays little attention to studying structure of synergy and valuation of synergy in M&A deals, initiated by private companies. Therefore, there are no inclusive methods exist to analyze different components of financial and operating synergy. This article aims to systematize existing literature about synergy and validate theoretical model suitable for synergy valuation in M&A deals in Russia. We also test several empirical hypotheses about synergy structure during growth and crisis periods on Russian M&A market. In the introductory part of the article we discuss concept of synergy in M&A deals and types of synergy. In the second part we review academic literature related to valuation of different components of operating and financial synergy. In the third part we develop inclusive valuation method for five components of synergy. We formulate hypotheses and discuss data sample in part four. In part five we test hypotheses on empirical data using our model and discuss significant results. This article may be useful for company management and investment analysis to estimate value of prospective M&A deals