A cost synergy refers to the opportunity of a combined corporate entity to reduce or eliminate expenses associated with running a business.

Southwest Airlines estimates the transaction's value at $3.2 billion and expects one time costs to integrate the two airlines of $500 million, with cost synergies of approximately $400 million annually.

But Mr. Lichtenberger spoke with enthusiasm, asserting, "We see some terrific market synergies and significant cost synergies."

For example, the companies' public projections on the revenue and cost "synergies" they expected to achieve as a result of the merger were about $14 billion to $16 billion.

They're talking about $2 billion in cost synergies for Bell Atlantic and GTE, and that's pretty reasonable.

"But it made sense to get the people in place and the cost synergies planned for before we tried to merge the cultures."

The bank is aiming to achieve £2bn of cost synergies.

"It should increase its geographic presence, improve its product range and innovation and lead to potentially significant cost synergies," Mr Mees added.

AT&T has calculated that it will reap $3 billion per year in "operational savings" and "cost synergies" as a result of the merger.

At odds here are the anticipated cost synergies that might emerge from a deal with Xstrata.