Discussion: Failure to define costs & synergies
Acquirers are more prone to overestimate the amount of synergies and under-estimate the time and money required to realize synergies. This conclusion is suggested by the studies that show that buyers often tend to overpay for acquisitions. This overpayment is often justified by overstating synergies, possibly reflecting over-optimism or hubris. Search for an example of overestimating synergies or under-estimating costs to achieve synergies and share your thoughts with the class.