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Table 4 Case characteristics other than uncertainty and controversy

From: Constructing M&A valuation: how do merger evaluation methods differ as uncertainty and controversy vary?

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.