Horizon Electronic Corporation is contemplating the acquisition of Potterton High$-$tech Co$.$

The values of the two companies as separate entities are $$150$ million and $$90$ million,

respectively. Horizon estimates that by combining the two companies, it will reduce

marketing and administrative costs by $$1,500,000$ per year in perpetuity. Horizon can pay

$$95$ million cash for Potterton. The opportunity cost of the capital is $5\%.$

What is the synergy of the merger?