Tuesday, November 24, 2020

Post-Merger Product Repositioning: An Empirical Analysis

Post-Merger Product Repositioning: An Empirical Analysis

Enghin Atalay

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Alan Sorensen

Wanjia Zhu

Christopher Sullivan

University of Wisconsin - Madison - Department of Economics


This paper investigates firms’ post-merger product repositioning. We compile information on conglomerate firms’ additions and removals of products for a sample of 61 mergers and acquisitions across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by the merging firms, and the products that are dropped tend to be particularly dissimilar to the firms’ existing products. These results are consistent with theories of the firm that emphasize core competencies linked to particular segments of the product market.


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