Ex-Post Merger Review and Divestitures

André Romahn () and Richard Friberg
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André Romahn: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN, http://www.iese.edu

No D/1056, IESE Research Papers from IESE Business School

Abstract: Divestitures have received little attention in ex-post evaluations of mergers. In partial remedy we simulate the effects of the Carlsberg-Pripps merger in the Swedish beer market and compare the predicted outcomes with those observed ex-post. There are no important price increases following the merger and prices of divested beers fell. Our merger simulations, that are based on a random coefficients logit model, capture these pricing patterns and suggest that the divestitures were important in limiting price increases. Knowledge of the retailer's markup rules allows us to discard retailer behavior as an explanation for the pricing patterns.

Keywords: Merger simulation; ex-post merger review; divestitures; demand for beer (search for similar items in EconPapers)
JEL-codes: K21 L11 L41 L66 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2012-12-18
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:ebg:iesewp:d-1056

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