Journal article
The role of divestitures in horizontal mergers
Journal of corporate finance (Amsterdam, Netherlands), Vol.72, p.102132
02/01/2022
DOI: 10.1016/j.jcorpfin.2021.102132
Abstract
We study the effectiveness of divestitures as a merger remedy. We show that divestitures are more effective in mitigating the market power impact of mergers if the merging firms divest assets to buyers outside the industry rather than existing rivals. Divestitures are also more effective as merger remedies when the merging industry is concentrated and when powerful customers are absent. Notably, stock price reactions of the acquirer and rivals suggest that firms are more concerned with maintaining a competitive edge relative to each other than gaining market power relative to customers.
Details
- Title: Subtitle
- The role of divestitures in horizontal mergers
- Creators
- Mosab Hammoudeh - California State University, FullertonAmrita Nain - University of IowaYiming Qian - University of Connecticut
- Resource Type
- Journal article
- Publication Details
- Journal of corporate finance (Amsterdam, Netherlands), Vol.72, p.102132
- Publisher
- Elsevier
- DOI
- 10.1016/j.jcorpfin.2021.102132
- ISSN
- 0929-1199
- eISSN
- 1872-6313
- Number of pages
- 18
- Language
- English
- Date published
- 02/01/2022
- Academic Unit
- Finance
- Record Identifier
- 9984380491402771
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