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In 2012 the Campbell soup company acquired Bolthouse Farms for $ 1.55 billion.
In 2012 the Campbell soup company acquired Bolthouse Farms for $ 1.55 billion. This acquisition increased the level of vertical integration in Campbell , as Bolthouse Farms owned and operated extensive farming operations were it produced many food items used in Campbell’s products. Suppose that the value of produce provided by these farms after the acquisition would be $75 million per year for Cambpell and that in addition Campbell coula save $10 million per year in costs it would otherwise spend on searching for and negotiating over equivalent produce. However the transaction cost of the acquisition required a one time payment of $50 million . if the interest rate used to discount future earning is 5% what is the gain to Cambpall’s from acquisition?