Editing Synergy (section)

===Financial===
[[Finance|Financial]] synergy gained by the combined firm is a result of number of benefits which flow to the entity as a consequence of acquisition and merger. These benefits may be:

====Cash slack====
This is when a firm having a number of cash extensive projects acquires a firm which is cash-rich, thus enabling the new combined firm to enjoy the profits from investing the cash of one firm in the projects of the other.

====Debt capacity====
If two firms have no or little capacity to carry [[Corporate bond|debt]] before individually, it is possible for them to join and gain the capacity to carry the debt through decreased gearing (leverage).  This creates value for the firm, as debt is thought to be a cheaper source of finance.

====Tax benefits====
It is possible for one firm to have unused [[Tax deduction|tax benefit]]s which might be offset against the profits of another after combination, thus resulting in less tax being paid. However this greatly depends on the tax law of the country.