In 2012, SIGMA, a leading player in health insurance, announced its intentions to acquire GAMMA, the...

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In 2012, SIGMA, a leading player in health insurance, announced its intentions to acquire GAMMA, the nation's largest health maintenance organization, and provided synergy as a rationale. On the announcement of the stock swap merger, SIGMA's stock price, which was $45.00, dropped to $43.65, while GAMMA's stock price surged from $68.00 to $85.00. SIGMA had 400 million shares, and GAMMA had 50 million shares outstanding at the time of the announcement What is the value, if any, that financial markets are attaching to synergy in this merger? Give your answer without the $ sign In 2012, SIGMA, a leading player in health insurance, announced its intentions to acquire GAMMA, the nation's largest health maintenance organization, and provided synergy as a rationale. On the announcement of the stock swap merger, SIGMA's stock price, which was $45.00, dropped to $43.65, while GAMMA's stock price surged from $68.00 to $85.00. SIGMA had 400 million shares, and GAMMA had 50 million shares outstanding at the time of the announcement What is the value, if any, that financial markets are attaching to synergy in this merger? Give your answer without the $ sign

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To determine the value of synergy in this merger we need to compare the combined market value of SIG... View the full answer