Synergy

Synergy is the concept that the value and performance of two companies combined will be greater than the sum of the separate individual parts. Synergy is a term that is most commonly used in the context of mergers and acquisitions (M&A).

Overview

Synergy, in general, may be defined as two or more things functioning together to produce a result not independently obtainable. The term synergy comes from the Attic Greek word συνεργία synergia from synergos, συνεργός, meaning "working together".

History

The concept of synergy has been in existence since the creation of humankind, with the phrase "the whole is greater than the sum of its parts" being used to describe the phenomenon. However, the term "synergy" was not used until the 19th century, and has been used in a variety of fields, including physics, biology, and business.

In business

In the context of business, synergy is the potential financial benefit that is expected from the combination of two companies. Synergy is a key factor in many mergers and acquisitions. The idea of a merger or acquisition is to create a new, larger entity that will be more profitable than the two companies would be separately.

In biology

In biology, synergy is the interaction of elements that when combined produce a total effect that is greater than the sum of the individual elements, contributions, etc. This is a basic component of evolution and natural selection.

In pharmacology

In pharmacology, synergy is the increased effect of two drugs when used together. For example, drug A and drug B each have a certain effect when used alone. If used together, they can have a greater effect than one would expect from simply adding the effects of A and B.

See also

• Cooperation
• Teamwork
• Collaboration
• Mergers and acquisitions
• Evolution
• Natural selection
• Pharmacology

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