Iversen points out that the combination of enterprises with different management ability level, could effectively lead to the improvement of efficiency. In essence, management synergy is the result of the effective transfer of management ability between enterprises after acquisitions, and the derivative of the new management resources and improvement of overall management ability. Management synergy theory suggests that if the enterprises with low management efficiency, or not, give full play of business potential merger with the highly efficient management team and management ability more than itself, then the two enterprises could optimize the management and reach common benefits.

Operating synergy effect is that the appreciation of acquisitions is from the expansion of the asset scale,; it could be realized through horizontal, vertical and conglomerate acquisitions. Reduction on transaction costs, decentralization of management risk and increase in market monopoly could gain economic scale and scope economy of excess returns. Through financial integration after acquisitions, enterprises could achieve economies of scale in production and management, and reduction on production costs. Through effective integration of surplus management capability and production capacity could expand the scale of production and business operation, increase output and share the fixed costs, which finally resulting in a reduction of unit production costs.

Both management synergy and operating synergy emphasize the positive effect of acquisitions through expansion and complementary of organizational capital,. nNevertheless, the management of a company is not likely to increase too fast,; it seems not consistent with the American M&A wave. In order to solve the flaw of the explanatory power of the management synergy theory and operating synergy theory to the real acquisition behaviors, Weston proposes financial synergy theory, which states that complementarity between the M&A enterprises is not necessarily being the aspects of management ability and organizational capital, but the complementary in investment opportunities and internal cash flow. Through acquisitions, enterprises could create new value due to improvement of debt capacity, increase in company growth opportunities, reduction on cost of capital and ‘mutual insurance’ effect of debt.

The reason why acquisition happens is that the bidders have value evaluations for the targets and the bidders think acquisition is profitable. Under valuation theory states that most of acquisition happens in the case of the value of the targets is undervalued. When the valuation of an enterprise to another enterprise is higher than the valuation of the latter itself, the former is likely to acquire the latter. Underestimation of the value of target enterprises usually includes the following situations: firstly, bidders own the internal information of the targets which cannot be obtained from external markets; secondly, the management ability of the targets does not play their potential; thirdly, the market value of assets is different from the replacement cost due to some causes such as inflation

Market power theory states three motivations of M&A: firstly, when product demand decreases, and under the condition of excess production capacity and price-cutting competition, enterprises will unite to realize the rationalization of industry;