Uncertain merger synergies, passive partial ownership, and merger control

Arbeitspapier

We examine the competitive effects of a passive partial ownership (PPO) when it serves as an instrument for the acquirer firm to learn the merger synergies with the target firm in advance. The realization of a synergy is uncertain ex ante, so that a direct merger exhibits a downside risk not only for the merging candidates but also for consumers. We show that minority shareholdings can reduce this downside risk as they allow for a sequential takeover where the acquirer takes an initial minority share, becomes an insider, and learns the merger synergy. We show how this feature of PPOs affects a firm's takeover strategy and the decision problem of the antitrust authority. We derive implications for a merger control approach to PPO acquisitions, where we examine a forward looking price test and a safeharbor rule.

Angaben zum Objekt

• Sprache: Englisch
• ISBN: 978-3-86304-259-2

Verweise und Beziehungen

• Erschienen in: Series: DICE Discussion Paper ; No. 260

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Monopolization; Horizontal Anticompetitive Practices
• Thema: Merger Control ; Passive Partial Ownership ; Synergies

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Shekhar, Shiva ; Wey, Christian
• Ereignis: Veröffentlichung
• (wer): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (wo): Düsseldorf
• (wann): 2017

Weitere Informationen

• Handle: http://hdl.handle.net/10419/162838
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ