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It is typically doable for an acquirer and its goal to achieve the next degree of sales growth together than either firm might by itself. Income enhancements are notoriously hard to estimate, however, as a result of they contain external variables beyond management’s control. The shopper base of the acquired company, for example, may react negatively to different prices and product options. A combined customer base could balk at making too many purchases from a single supplier. And competitors may decrease their prices in response to an acquisition. Revenue enhancements are so difficult to predict, the truth is, that some sensible corporations do not even include them when calculating synergy worth. Matthew Slatter, the CEO of Financial institution of Melbourne, says, We mannequin this income enhancements, but by no means factor it into the worth.” Equally, Peter Shaw at ICI considers them soft synergies” and discounts them closely in calculations of synergy worth.
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