"Synergy" is among the most frequently used buzzwords in business today, employed to rationalize mergers, acquisitions, and restructurings. This paper first examines the common use of the term 'synergy'. It then discusses the actual meaning and cites situations in which the term is commonly misused. Despite consistent promises of post-merger synergies, merged firms frequently underperform their pre-merger predecessors, deliver lower dividends to shareholders, and create few productivity gains. Multiple studies concur that mergers rarely deliver the scale of synergies promised by their architects. The paper concludes with guidance both for dealing with promises of synergy and for creating potential synergies within one's own company.



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