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
Hello, can you link the case please?
Cheers,
Clara
Hello Kari!
Could you please reformulate your question so that we understand how to help you with it?
Cheers,
GB
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
Hi Kari,
I'm sorry but your question is very very difficult to follow. What exactly are you asking?
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
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
Dear Clara , Attaching link :https://www.preplounge.com/en/management-consulting-cases/interviewer-led-mckinsey-style/advanced/rea-reinsurance-85