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Table 4 Case characteristics other than uncertainty and controversy
| Deal targets | Relatedness | Revenue synergy | Cost synergy |
|---|---|---|---|
| Portal | Highly related; purchase of search engine and Internet capabilities by a portal | Enhanced distribution channel for the buyer’s contents; pick winners at early stage in related sector | Little; while some software engineers are redundant (+), the firm saves search costs to recruit further engineers by relocating redundant ones (−) |
| SmallEnergy | Highly related; same sector | Reduce excess capacity in the sector in order to increase market power and stability | Little; the facility of the target is less advanced than that of the buyer |
| BigMedia | Moderately related; exploit the trend of media-communication convergence | Enhanced distribution channel for the buyer’s contents | Little overlap in cost structure |
| BigEnergy | Moderately related; same sector but different location | Vertical integration increases the market power of the buyer | Little; economies of scale are difficult because of geographical factors and different position in value chain |
| Chip | Moderately related; use consumer intelligence gained in telecom service to develop non-memory chips; exploit the trend of software-hardware convergence | Help target with the chaebol’s internal resources; transfer the target’s capability to the buyer’s businesses | Little overlap between service (buyer) and manufacturing (target) value chain |
| Apparel | Related; the buyer has traded clothing and extended its business with the M&A | Design capability of the target is important to upgrade clothing business of the buyer | No cost synergy because the buyer and the seller are in different segments of value chain |
| SNS | Related; early social network service (seller); Internet affiliate (buyer) | Having both social network service and search engine can increase user base much | Moderate cost synergy; can save ad expenses, but the businesses of buyer and seller so far have no specific overlap |
| Card | Moderately related; credit card business (seller) has been an important target of many communication firm (buyer); fintech offers similar recent experience | Customer data of the buyer and the seller can be combined; mobile services can include finance function | No clear cost synergy between finance and telecommunication; marketing can be more efficient by combining customer data, but the buyer increased marketing expenses after the merger |
| BigMobile | Highly related; major US wireless operator (seller); telecom affiliate (buyer) | Moderate revenue synergy because of geographic differences although the buyer and the seller are in the same sector | No cost synergy in the short run because the buyer cannot restructure the seller due to stakeholders |
| SmallMedia | Moderately related; media content (seller) has been an important target of many communication firms (buyer); digital convergence is relevant | The buyer can sell the contents of the seller through its mobile channels | No cost synergy because of the differences in culture, value chain, and size. |
