Why synergy is a horrible word

In making presentations to investors, many CEOs try to justify a proposed merger or acquisition by saying it is “synergistic” or that the combination will result in “synergies”. When professional investors hear any version of this magic word, they usually sell the stock. Why ? because if the CEO had a good reason for the merger, such as reducing costs or acquiring patents, he would have said so. By invoking “synergies,” the CEO is signalling that he or she does not have a clear reason for doing the deal and is just trying to put a positive spin on a poorly understood transaction.

(Source unknown — some business book)


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