Beyond traditional synergies: exploring network, relational and nonmarket gains in European M&A

Purpose This study aims to explore the sources of synergy gains in European mergers and acquisitions (M&A) from 2010 to 2021, focusing on both traditional and emerging synergies. Empirically validate novel types of synergies, including relational, network and nonmarket synergies, alongside operational, financial and market power synergies. Examine the impact of firm characteristics, governance structures and market conditions on the magnitude and success of synergy gains postacquisition. Design/methodology/approach The research uses a quantitative approach, analyzing a sample of 342 European M&A transactions from 2010 to 2021. Synergy gains are evaluated through econometric modeling, examining the effects of various firm and transaction characteristics on value creation. Findings The study reveals that operational synergies, primarily driven by cost reductions and investment savings, are the most significant contributors to value creation in European M&A. Financial synergies, while present, have a more limited impact. Additionally, relational and network synergies emerge as crucial, enhancing firms’ positions within business networks. However, nonmarket synergies did not yield significant results, highlighting the challenges of quantifying intangible benefits. Firm characteristics such as board diversity and independence are found to positively influence the realization of these synergies. Practical implications For practitioners, the findings emphasize the importance of considering both traditional and emerging sources of synergies in M&A evaluations. Decision-makers should focus not only on operational efficiency but also on enhancing relational and network positioning to maximize postacquisition value. The study also highlights the role of strong governance, particularly board diversity and independence, in ensuring successful integration and synergy realization. Originality/value This study contributes to the existing literature by empirically validating previously unexplored synergies, particularly relational, network and nonmarket synergies, in the context of European M&A. By integrating network-based perspectives, it expands the scope of traditional synergy analysis and offers a more holistic view of value creation postacquisition. The research also provides practical insights by identifying key governance factors that influence the realization of these synergies, making it a valuable resource for both academics and practitioners.