ANALYSIS OF SOURCES OF COST SYNERGIES IN HORIZONTAL EXTERNAL GROWTH OPERATIONS

Abstract

The motivations for resorting to external growth operations are varied and specific to each company. In this paper, we will study the motivation due to the effects of cost synergies resulting from the coming together of the target's and the acquirer's integrated value chains in the horizontal operation. Theoretical answers will be given to two related questions to the effects of costs synergies: What are cost synergies in a horizontal external growth operation? What are the sources involved in this kind of synergy?