1. The synergy number is calculated by the company. The synergy calculation is typically sub-divided into many departments - Marketing, R&D, Infrastructure, Overheads, IT etc. Then under each of these departments, the department heads will make an estimation on how much they will save if the 2 companies merged. Like for example, under infrastructure, they would have saved about $500 million by eliminating redundant fibre optic cables and routing equipment.

EBITDA contributions is really nothing but the weighted average of the 2 individual EBITDA's. does that answer your question #2 - not sure if i got your question right ?

Yes Binny. Could you please answer Q3?

Regarding Q3 - good observation.
The NPV indeed would have been 0 if the time period of the synergies accumulation is the same time period for which you are calculating the NPV. If your NPV calculation was for 5 years then it would have been a negative NPV, if the full synergies were realized only after 8 years.

oh ok... 8 years seems to be a pretty long period. Probably in the period of 8 years, hadn't both the companies merged, the cash flows they would have individually generated could have been much better... so is there any method to find out if the deal was more profitable than the opportunity cost of the deal i.e. if the merger hadn't taken place?