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Urban Outfitters (an apparel retailer) is considering making a bid for Nutrify, an organic snacks company. Urban Outfitters' annual revenues is $800 M. Nutrify's annual
Urban Outfitters (an apparel retailer) is considering making a bid for Nutrify, an organic snacks company. Urban Outfitters' annual revenues is $800 M. Nutrify's annual revenues are $25M, and growing rapidly. Urban Outfitters' CEO and top management team believe that there is some overlap between the customer profile of the two companies, and if the two companies combine, via cross promotions and increased access to each other's distribution channels, Nutrify's sales will increase by $20M, and Urban Outfitters' sales will increase by $15M. [Nutrify is a made-up company, and the deal is also made up, only for the purpose of this question. Do not waste time googling Nutrify for additional information, you do not need any additional information to answer the question below.] Which of the statements below represents correct statement(s) of expected revenue synergies? Explain your reasoning clearly. a. Current revenues of the two companies, added to Urban Outfitter's expectations of the revenues from Nutrify after the combination - $800+25+20 M. b. Current revenues of the two companies, added to Urban Outfitter's expectations of the revenues from Nutrify and Urban Outfitter's own revenues after the combination $800+25+20+15M c. Expectations of the revenues from Nutrify and Urban Outfitter's own revenues after the combination - $20+15M. d. Current revenues of Nutrify as well as expectations of the revenues from Nutrify after the combination - $25+20M. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
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