You are handed a deck on a proposed acquisition. The target is worth less on its own than the asking price, and the gap is meant to be closed by synergies. Should the company go ahead?

On the deck's numbers the deal creates only about Rs 40 crore, and it breaks even at 86.7% synergy delivery. Deccan is worth Rs 800 crore alone plus Rs 300 crore of synergies, less Rs 60 crore of integration cost: Rs 1,040 crore for a Rs 1,000 crore price. The premium hands the seller almost all of the synergy value, so price, proof of the savings and deal structure decide it.

Value to the buyer against the price. The buyer's shareholders gain only if the target's standalone value plus the synergies, net of the cost of getting them, exceeds what is paid. The premium over standalone value, here Rs 200 crore, is the part of the synergiesExtra profit the combined company earns that neither company would earn alone, usually from cutting shared costs or selling more together. paid away to the seller before the deal closes.

Run the one sensitivity that matters: how much of the synergy must actually arrive. Suvarna breaks even when delivered synergies cover the Rs 200 crore premium plus Rs 60 crore of integration cost, Rs 260 crore out of Rs 300 crore, which is 86.7%. Cost savings often arrive late or partly, so a deal that needs almost all of them to break even is a deal priced for perfection.

Three things, each tied to the numbers. A lower price, a structure that shares the risk, and evidence for the savings. Every Rs 10 crore off the price moves breakeven down by about 3 points of delivery. Part of the price can be paid later only if targets are met, an earn-out. And the Rs 40 crore of savings needs a line-by-line plan: which plants, which overlapping costs, by which year.

Close with the strategic view, briefly, and keep the numbers in front. A strong answer says: strategically sensible, financially thin, proceed only on better terms. That is the shape interviewers are listening for, not a yes or no.