Which factors affect cost savings after horizontal M&A?

1. Utilization of 'Hard to trade assets', synergies • Hard to trade assets are values that only occurs because companies merged • E.g. eliminate disputes between two rivals over use of jointly used oil field ( value created by ‘coordination of a joint operation‘ is an asset as well) 2. Utilization of complementary skills in the merged companies • Each entity specializes on task in which comparative advantage – i.e. exploit complementary skills, more likely through merger than if two separate firms 3. Improved interoperability of products from the merged companies • E.g. two separate software components which before where incompatible (maybe on purpose)  with merger possible to make them compatible. 4. Improved "network configuration" • Cutting costs for R&D, e.g. by having different entities in the network communicate directly and more frequent with each other rather than to wait for the publication of a patent of rival firm.