Synergy Value

Definition

The incremental value created through the combination of two businesses that would not be achievable by either operating independently. Synergies may be cost-related (eliminating duplicated functions, procurement savings) or revenue-related (cross-selling, market expansion, pricing power). Under IFRS 3, acquirer-specific synergies are excluded from the fair value measurement of individual assets but are reflected in the premium paid above identifiable net asset value and are recorded as goodwill.