Why 20% for IT cost and 30% for Headquarter cost

REA Reinsurance
Neue Antwort am 5. Jan. 2021
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kari fragte am 31. Dez. 2020
EY-Parthenon Strategy & M&A professional

Please help with my query . In case of HQ cost 10% was removed from our client and 20% from target which is in line with 30% assumption . But in IT it was only total 20% .

Also of you can explain wht staff cost should not be considered for synergy . Thank you

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Clara
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antwortete am 2. Jan. 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello, can you link the case please?

Cheers,

Clara

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kari am 6. Jan. 2021

Dear All - Further clarifying my question . In the case we have taken below assumption :reasonable percentage of costs that can be saved through synergies. 30% would be a good estimation. Now while calculating the Headquarter cost , I see below calculation Headquarter costs Eligible for synergies: Yes! REA: 10% * 4,000,000 = $400,000 Acquired company: 20% * $3,600,000 = $720,000 Total = $1,120,000 (30% = $336,000 for simplification: $350,000). I am taking this as 30 % . But while calculating IT cost I see below calculation T costs Eligible for synergies: Yes! REA: 90% * $4,000,000 * 10% = $360,000 (costs in regions * total cost * share of IT costs) Acquired Company: 80% * $3,600,000 * 10% = $288,000 (Which is 20% ) . Hope this is clear please

kari am 7. Jan. 2021

Dear Clara , Attaching link :https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/advanced/rea-reinsurance-85

Gaurav
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antwortete am 5. Jan. 2021
Ex-Mckinsey|Certified Career Coach |Placed 500+ candidates at MBB & other consultancies

Hello Kari!

Could you please reformulate your question so that we understand how to help you with it?

Cheers,

GB

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kari am 6. Jan. 2021

Dear All - Further clarifying my question . In the case we have taken below assumption :reasonable percentage of costs that can be saved through synergies. 30% would be a good estimation. Now while calculating the Headquarter cost , I see below calculation Headquarter costs Eligible for synergies: Yes! REA: 10% * 4,000,000 = $400,000 Acquired company: 20% * $3,600,000 = $720,000 Total = $1,120,000 (30% = $336,000 for simplification: $350,000). I am taking this as 30 % . But while calculating IT cost I see below calculation T costs Eligible for synergies: Yes! REA: 90% * $4,000,000 * 10% = $360,000 (costs in regions * total cost * share of IT costs) Acquired Company: 80% * $3,600,000 * 10% = $288,000 (Which is 20% ) . Hope this is clear please

Ian
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antwortete am 2. Jan. 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi Kari,

I'm sorry but your question is very very difficult to follow. What exactly are you asking?

War diese Antwort hilfreich?
kari am 6. Jan. 2021

Dear All - Further clarifying my question . In the case we have taken below assumption :reasonable percentage of costs that can be saved through synergies. 30% would be a good estimation. Now while calculating the Headquarter cost , I see below calculation Headquarter costs Eligible for synergies: Yes! REA: 10% * 4,000,000 = $400,000 Acquired company: 20% * $3,600,000 = $720,000 Total = $1,120,000 (30% = $336,000 for simplification: $350,000). I am taking this as 30 % . But while calculating IT cost I see below calculation T costs Eligible for synergies: Yes! REA: 90% * $4,000,000 * 10% = $360,000 (costs in regions * total cost * share of IT costs) Acquired Company: 80% * $3,600,000 * 10% = $288,000 (Which is 20% ) . Hope this is clear please

Clara

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McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut
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