DP9354 Measuring Unilateral Effects in Partial Acquisitions

Author(s): Duarte Brito, Ricardo Ribeiro, Helder Vasconcelos
Publication Date: February 2013
Keyword(s): Antitrust, Demand Estimation, Differentiated Products, Oligopoly, Partial Acquisitions, Unilateral Effects
JEL(s): C54, D12, L13, L41, L66
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9354

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.