Measuring Unilateral Effects in Partial Acquisitions

Posted by D. Daniel Sokol

Duarte Brito, Universidade Nova de Lisboa, Ricardo Ribeiroz, Universidade Catolica Portuguesa and Helder Vasconcelos, Faculdade de Economia do Porto are Measuring Unilateral Effects in Partial Acquisitions.

ABSTRACT: Recent years have witnessed an increased interest, by competition agencies, in assessing the competitive effects of partial acquisitions. We propose an empirical structural methodology to examine quantitatively the unilateral impact of partial acquisitions involving pure financial interests and/or effective corporate control on prices, market shares,firm profits and consumer welfare. The proposed methodology can deal with differentiated products industries, with both direct and indirect partial ownership interests and nests full mergers (100% financial and control acquisitions) as a special case. We provide an empirical application to several acquisitions in the wet shaving industry.