Practice question · Match the pairs
Match each M&A concept to its meaning.
- Synergy
- Premium
- Winner’s curse
- Due diligence
- Combined value exceeding the sum of the parts
- Price paid above the target’s market value
- Pre-deal investigation of the target’s books
- The most optimistic bidder overpays
Hints
- Separate what the deal creates from what the acquirer pays for it.
- The difference between the two is what shareholders actually get.
Show the answer
- Synergy → Combined value exceeding the sum of the parts
- Premium → Price paid above the target’s market value
- Winner’s curse → The most optimistic bidder overpays
- Due diligence → Pre-deal investigation of the target’s books
Why
The four words that decide whether a deal creates or destroys acquirer value.
Practise Mergers and Acquisitions
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