Possible benefits of mergers Complementarity in Financial Slack ex: a cash-poor firm merging with a cash-rich firm will be able to accept more positive NPv projects Removal of Ineffective Managers ex: ineffective target firm managers may be replaced, increasing the value of the target firmPossible Benefits of Mergers • Complementarity in Financial Slack ex: a cash-poor firm merging with a cash-rich firm will be able to accept more positive NPV projects. • Removal of Ineffective Managers ex: ineffective target firm managers may be replaced, increasing the value of the target firm