ABC Ltd. proposes to acquire XYZ Ltd. at an agreed valuation of Rs.4.0 billion through the issue of shares. Both of them agreed to exchange shares in the ratio of 1:1 (i.e.; one share of target is equivalent to one share of the acquirer). On the date of deal-making, the market price of shares of the acquirer was Rs. 100 per share, while that of the target was Rs.70 per share. Both ABC Ltd. and XYZ Ltd. have 60 million and 40 million outstanding shares respectively in their balance sheets as on the date of deal. ABC Ltd. estimated an amount of Rs.2.0 billion synergy to be derived from business growth and cost rationalization.

What is the shareholder value addition to the acquirer shareholders, if the value of synergy reduces from Rs. 2.0 billion to Rs.1.5 billion to Rs. 0.5 billion?

Answer the above question in (a), if the acquisition deal is done through cash instead of shares.