A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures

John M. Barrios and Thomas G. Wollmann

American Economic Journal: Microeconomics, 2024, vol. 16, issue 4, 77-111

Abstract: Antitrust authorities search public documents to discover anti-competitive mergers. Thus, investor disclosures may alert them to deals that would otherwise go undetected, creating disincentives for managers to divulge certain transactions. We study this behavior in publicly traded US companies. First, we employ a regression discontinuity approach to estimate the effect of mandatory disclosures. We find that releasing information to investors poses antitrust risk. Second, we introduce a method for measuring undisclosed mergers that relies on financial accounting reporting requirements. We find that undisclosed mergers total $1.85 trillion between 2002 and 2016.

JEL-codes: D22 G32 G34 G38 K21 L41 M41 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1257/mic.20220064

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