Provide an example of revenue synergy.

Provide an example of revenue synergy.

• A. Cross-sell products to new customers or expand into new geographies.
• B. Consolidate buildings to reduce costs.
• C. Hire more staff.
• D. Write off goodwill.

Answer: (A)

Revenue synergies show up when a merger enables more sales than either company could achieve alone, often by combining how you reach customers, the products you offer, or the markets you serve. An example is cross-selling products to new customers or expanding into new geographies. By presenting a broader, integrated solution to customers or leveraging a larger distribution footprint to access regions the other company covered, the merged entity can generate additional revenue that wouldn’t exist without the combination. This stands in contrast to cost-based improvements, like reducing expenses through building consolidation, which are not revenue synergies. Activities like hiring more staff don’t automatically create new sales, and writing off goodwill is an accounting action, not a way to boost revenue.

Revenue synergies show up when a merger enables more sales than either company could achieve alone, often by combining how you reach customers, the products you offer, or the markets you serve. An example is cross-selling products to new customers or expanding into new geographies. By presenting a broader, integrated solution to customers or leveraging a larger distribution footprint to access regions the other company covered, the merged entity can generate additional revenue that wouldn’t exist without the combination. This stands in contrast to cost-based improvements, like reducing expenses through building consolidation, which are not revenue synergies. Activities like hiring more staff don’t automatically create new sales, and writing off goodwill is an accounting action, not a way to boost revenue.