Study of the synergy effect between the subsidiary company

The purpose of the company to carry on merger and acquisition is in order to obtain the synergy effect, so for realizing synergy effect it is necessary to distribute the income fairly among the companies participating in the merger & acquisition (M&A) to break the obstacle of sharing resources. In this paper we will study the synergy effect after the company merging other companies, build up an evaluation system of the contribution of the subsidiary companies to the synergy effect, and construct a synergy effect contribution evaluation model based on the entropy method. Finally we will show the utilization of this model through a simple. The company can use the evaluation result of the model to encourage the merged subsidiary company sharing their resources in order to realize the synergy effect.