Net Gains from Synergy: SBC Acquisition of AT&T
2005 2006 2007 2008 2009 2010 2011 2012
Bottom Line
Operations savings 0.2 0.4 0.6 0.9 1 0.9 0.8
Staff savings 0.1 0.2 0.3 0.4 0.4 0.4
Sales & support 0.3 0.4 0.6 0.6 0.5 0.4
0.2 0.8 1.2 1.8 2 1.8 1.6
Top Line Gains 0.375 0.375 0.375 0.375 0.375 0.375
Severance costs -3 -2 -1
Annual gains -2.8 -0.825 0.575 2.175 2.375 2.175 1.975
Terminal value 17.95
Present value -2.59 -0.71 0.46 1.60 1.62 1.37 11.63
Sum 13.4
2.5
Top-line gains
Assumptions 2
Growth after 2012 0% Bottom-line gains
WACC 11% 1.5
1
0.5
0
1 2 3 4 5 6 7