The determinants of merger litigation strategies: An empirical analysis of EC mergers

Peter Ormosi
Additional contact information
Peter Ormosi: Centre for Competition Policy, University of East Anglia

No 2010-01, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: Mergers with anticompetitive effects can gain regulatory approval if they prove that the benefits of the merger outweigh the negative effects (efficiency defence), and/or if they offer to modify the merger transaction in a way that eliminates these adverse effects (merger remedy). Although these two merger control instruments have been analysed separately, little work has been dedicated to modelling merger litigation where both the provision of efficiency-related evidence and remedy-offers are at the merging firms discretion, which is the case for example in the EC. This paper is an attempt to fill the empirical part of this gap. Its novelty lies not only in empirically modelling the system of decisions that firms face in merger litigation but in using data from company reports on the merger-generated synergy expectations signalled to shareholders, which allows the direct empirical testing of some of the assumptions and findings from previous works. Evidence is presented that firms' own efficiency expectations do not have an impact on the probability of applying for efficiency defence; that pre-merger synergy expectations enhance the willingness to offer remedies; false efficiency claims can be distinguished by looking at the timing of the remedyoffer; and finally, the cost of delay plays a central role in designing firms' litigation strategy, especially when these costs exceed the cost of the remedy.

Date: 2010-01-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ueaeco.github.io/working-papers/papers/ccp/CCP-10-01.pdf main text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2010_01

Ordering information: This working paper can be ordered from
Juliette Hardman, Center for Competition Policy, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK

Access Statistics for this paper

More papers in Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Juliette Hardmad ().