Solved Cases:

Synergy in the Deal

Vertical integration of the two companies resulting in a 'more manageable' business and increased sales volumes


A group of companies engaged in the manufacturing of low value-added products is merged with a production holding (high value-added processing and distribution). As a result of the merger, it was planned to create a group with a single management company (corporate center). Companies' shareholders were concerned about the need to develop and integrate a mechanism for managing the group through a new management company.


To create the concept of a new company, reviews of similar companies, both Russian and foreign, were conducted, the processes of existing merging companies were analyzed in-depth. Based on the new product line, the processes and functionality of the designed company were compiled. To calculate the synergistic effect of the merger, financial models of both companies and the new company were constructed.


The project identified the main business units of both groups, their boundaries and areas of responsibility. The business processes of business units and two management companies of each group were also analyzed in a comprehensive manner. Based on the strategic vision and goals of the shareholders, the requirements for the role and structure of the new corporate center are determined. The information collected and analyzed, as well as the calculated synergistic effect, made it possible to develop a functional structure and model of managerial interactions, and the organizational structure of a new management company. The developed management model was applied in the process of merging the companies. Based on this model, a one and a half year plan of organizational changes was drawn up. It was also recommended to abandon one of the products due to its weak prospects (high and increasing competition, decreasing market size).


As a result of the merger, not only did sales volumes increase, but costs along the entire production chain and management costs were significantly reduced. Overall, according to shareholders, the new company has become "more manageable".

Example of discovering and acquiring a synergy