Efficiency Gains from Mergers

Röller, Lars‐Hendrik; Stennek, Johan; Verboven, Frank

doi:10.4337/9781781952993.00010

Cited by 80 publications

(72 citation statements)

References 111 publications

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“…See Röller et al (2001) on considerations about the role of efficiency gains in merger control. 17 One exception is the literature on pre-emptive mergers (see Fridolfsson and Stennek, 2005).…”

Section: Measuring Firms' Profitability: the Event Study Methodologymentioning

confidence: 99%

How effective is European merger control?

Duso

Gugler

Yurtoğlu

2011

European Economic Review

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This paper applies a novel methodology to a unique dataset of large concentrations during the period 1990-2002 to assess merger control's effectiveness. By using data gathered from several sources and employing different evaluation techniques, we analyze the economic effects of the European Commission's (EC) merger control decisions and distinguish between blockings, clearances with commitments (either behavioral or structural), and outright clearances. We run an event study on merging and rival firms' stocks to quantify the profitability effects of mergers and merger control decisions. We back up our results and methodology by using alternative measures for the merger's profitability effects based on balance-sheet data and obtain consistent results. Our findings suggest that outright blockings solve the competitive problems generated by the merger. Remedies are not always effective in solving the market power concerns, at least not on average. Nevertheless, both structural (divestitures) and behavioral remedies do help restore effective competition when correctly applied to anticompetitive mergers during the first investigation phase. Yet, they are on the whole ineffective or even detrimental when applied after the second investigation phase. Finally, remediesespecially behavioral ones -seem to constitute a rent transfer from merging firms to rivals when mistakenly applied to pro-competitive mergers.

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Section: Measuring Firms' Profitability: the Event Study Methodologymentioning

confidence: 99%

How effective is European merger control?

Duso

Gugler

Yurtoğlu

2011

European Economic Review

View full text Add to dashboard Cite

show abstract

“…After all, they also seem to be easier to integrate (Grimpe, 2007). Contrary to this, acquisition targets can be big players in the market that provide the acquiring firm with the entry to a foreign market, with a large market share, product portfolio and a well developed distribution and customer network (Caves, 1989;Scherer and Ross, 1990;Röller et al, 2001). Moreover, the acquisition of a large player in the market immediately reduces competition.…”

Section: Introductionmentioning

confidence: 99%

Market and technology access through firm acquisitions: Beyond one size fits all

Grimpe¹,

Hussinger²

2008

Progress in International Business Research

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp08037.pdf larger targets may provide better access to markets and established products as these firms typically also have a higher market share and a better distribution network. Non-technical summaryLarger acquisitions should hence also tend to be cross-border rather than domestic.Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we investigate whether standard estimation procedures that focus on the average acquisition target in order to unveil the underlying takeover motivation show the complete picture. AbstractFirm acquisitions have been shown to serve as a way to gain access to international markets, technological assets, products or other valuable resources of the target firm.Given this heterogeneity of takeover motivations and the skewness of the distribution of the deal value we show whether and how the importance of different takeover motivations changes along the deal value distribution. Based on a comprehensive

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“…For example, cross-border mergers and acquisitions -which take a considerable share in FDI -may also be motivated by market power (Neary, 2007), by the desire to gain access to country-or firm-specific assets Yeaple, 2007, 2008), or by efficiency motives, exploiting economies of scale and scope (Röller, Stennek, and Verboven, 2001). The expected effects of FDI through acquisitions depend on whether efficiency increases exist and whether they are large enough to outweigh the reduction in production due to increased market concentration.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Cross-Border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany

2011

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Efficiency Gains from Mergers

Cited by 80 publications

References 111 publications

How effective is European merger control?

How effective is European merger control?

Market and technology access through firm acquisitions: Beyond one size fits all

Cross-Border Investment, Heterogeneous Workers, and Employment Security – Evidence from Germany

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