Drawing on twenty years of merger analysis literature, this single source
offers practical solutions to a wide range of problems faced by specialists
working in the field of mergers and acquisitions. The authors take an
industrial organization approach in which effects on profits, on consumer
surplus and on overall welfare are of greatest relevance. The focus is
primarily on horizontal mergers, although vertical and conglomerate mergers
are addressed when producers of complementary goods are involved. Among the
issues and elements examined, the authors provide answers to the following: ;
How does a merger affect the insider firm's profitabifity?
Why may outsiders stock market value increase or decrease following a merger?
What are the expected welfare effects of a merger?
What sort of arguments can be used for merger defense? How do economists model
the firm's merging decision?
How can the authorities simulate the price effects of a horizontal merger?
Is post-merger entry likely to compensate the effects of a merger?
The discussion proceeds from an analysis of the simplest exercise of market
power to evermore complex merger environments. In their detailed coverage of
policy evaluation of proposed acquisitions, the authors provide a merger
simulation toolkit which can be applied to important recent judicial decisions
in the field. This book will be of great value not only to academics in
microeconomics and industrial organization, but also to lawyers and officials
seeking expert practical guidance in the business or administrative
responsibilities surrounding mergers and acquisitions.
Contents 1 Introduction I Theory 2 Quantity Competition
3 Price Competition 4 Other Strategic Variables 5 Producers
of Complements 6 Efficiencies 7 Entry and Exit 8 Merger
Games II Policy 9 Policy Implications 10 Merger Simulation 11
Merger Cases, Conclusions, Bibliography