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It is sometimes doable for an acquirer and its goal to realize a better degree of sales progress collectively than both firm could by itself. Income enhancements are notoriously arduous to estimate, nevertheless, as a result of they contain exterior variables past management’s management. The customer base of the acquired firm, for instance, might react negatively to totally different prices and product features. A combined buyer base might bid for papers balk at making too many purchases from a single supplier. And rivals could lower their costs in response to an acquisition. Income enhancements are so troublesome to predict, in fact, that some clever corporations do not even embody them when calculating synergy value. Matthew Slatter, the CEO of Bank of Melbourne, says, We model this revenue enhancements, however by no means factor it into the price.” Similarly, Peter Shaw at ICI considers them gentle synergies” and discounts them closely in calculations of synergy worth.
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