Why are the value of synergies from an acquisition estimated separately?

Estimating the value of synergies from an acquisition separately is crucial as it allows acquirers to recognize the potential benefits that the merger may bring to their organization beyond the immediate financial metrics of the acquisition. This practice can lead to a more nuanced understanding of how the combined companies can improve their operations, reduce costs, or generate additional revenue, thus enhancing the overall value of the acquisition for the buyer.

Retaining a portion of the value of synergies is significant for various stakeholders, particularly shareholders. When the buyer successfully identifies and potentially articulates synergies, it can justify a higher purchase price to the seller while retaining expected future gains associated with those synergies. This practice serves to enhance the overall value proposition for the acquirer's shareholders, as they benefit from operational improvements and financial efficiencies derived from the integration of the two companies.

The other choices either fail to capture the essence of why estimating synergies is done separately or misinterpret the strategic motivations behind the acquisition process. For instance, enhancing risk exposure or simplifying regulatory appraisals focuses on aspects that do not directly relate to value creation for the buying entity or its shareholders. Similarly, minimizing taxation impacts, while an important consideration in some transactions, does not encapsulate the primary reason for the separate estimation