Multiple synergies

Whereas the megadeals of the tech boom were propelled by futuristic visions, the current crop of mergers is justified for their mundane cost savings. But not all cost savings, or synergies to give them their fancy name, are created equal. Consider the market’s reaction to some of the recent mergers. Johnson & Johnson’s acquisition of Pfizer’s consumer goods business got a big raspberry from investors. Based on comparable transactions, J&J paid around $6bn more for the maker of Listerine than it ...