When speaking about mergers and acquisitions you often hear the word “synergy” used to explain the rationale of a deal. Here are just a few examples from recent headlines: “The Renault-Nissan carmaking alliance expects to generate 5.5 billion euros ($6 billion) of synergies in 2018.” “[Sysco] said it believed it could achieve $600 million in […]

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Packaged food company ConAgra Foods plans to divest its private label branch Ralcorp after acquiring it in 2012 for $5 billion. Why is ConAgra spinning off this private label business so quickly after acquisition? The many reasons include pressure from activist investors, poor performance, increased competition, and tighter margins. Ralcorp’s revenues dropped by 6 percent […]

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After battling for six months, Men’s Wearhouse and Jos. A. Bank finally came to an acquisition agreement on March 11 for $1.8 billion, forming the country’s fourth-largest men’s retailer. Men’s Wearhouse expects cost synergies of $100-150 million over the next three years to result from the deal, including the benefit of better purchasing power. While […]

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