1. Catalog
  2. Finance
  3. Mergers & Acquisitions (M&A)
  4. Merger Synergy Valuation Model - Excel
Merger Synergy Valuation Excel Model
  • 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
View all versions & Certificate
certified

Merger Synergy Valuation Excel Model

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

Prof. Aswath Damodaranby Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 1,005
NYU Stern School of Businesswith NYU Stern School of Business
An Education in PossibleFollow 50
52 reviews3,663 views|Start the discussion!|Bookmark download for free
synergyvaluationmergersindependent firmscombined firm

Description
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

Side note: If you have appreciated this model, feel free to give it a rating/review!

This Best Practice includes
1 Excel Model File

Prof. Aswath Damodaran offers you this Best Practice for free!

download for free

Add to bookmarks

Discuss

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)

please wait...