Merger Synergy Valuation Excel Model
Originally published: 17/06/2016 13:39
Last version published: 02/02/2018 14:50
Publication number: ELQ-90266-2
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Merger Synergy Valuation Excel Model

This Excel Model estimates the value of synergy in a merger.

This simple excel model enables you with the beta, pre-tax cost of debt, tax rate, debt to capital ratio, revenues, operating income (EBIT), pre-tax return on capital, reinvestment rate and length of growth period to compute the Value of the global synergy in a merger.

- Prof. Aswath Damodaran

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This Best Practice includes
1 Excel Model File

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Further information

The objective of this model is to get the following output values for the acquiring firm, target firm and merged firm:
- Cost of Equity
- After-tax cost of debt
- Cost of capital

- After-tax return on capital
- Reinvestment rate
- Expected growth rate

- Present Value (PV) of Free Cash Flow for the Firm (FCFF) in high growth
- Terminal value
- Value of firm today

Value of synergy:
- value of independent firms
- value of combined firm
- value of synergy

4.8 / 5 (52 votes)

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