The efficiency gains or synergies that are attained in horizontal mergers or vertical mergers. It reflects the value realized from the additional cash flows generated (or the cash outflows saved) by combining two or more companies. Differently stated, operating economies refer to the reductions in costs per unit thanks to the increase in a company’s operations both in terms of size and scale. In this sense, operating economies include both economies of scale and economies of scope.
Operating economies is another term for operating synergy.
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