Merger Modeling

Merger modeling is a financial analysis tool used to evaluate the impact of merging two companies. It projects how the merger will affect financial metrics like revenue, costs, and earnings per share over time. Analysts incorporate details such as purchase price, funding sources, and synergies—cost savings or added revenues expected from the merger. The goal is to determine if the merger will create value for shareholders and how it changes the combined company's financial performance compared to operating independently. These models aid executives in making informed decisions about potential mergers or acquisitions.