Killer Acquisitions: Evidence from European Merger Cases

Marc Ivaldi, Nicolas Petit and Selçukhan Unekbas
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Marc Ivaldi: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Nicolas Petit: EUI - European University Institute - Institut Universitaire Européen
Selçukhan Unekbas: EUI - European University Institute - Institut Universitaire Européen

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Abstract: The killer acquisitions theory states that established firms buy new businesses to pre-empt future competition, particularly in the pharmaceutical and digital industries. The theory fuels demand to make merger policy more restrictive. But is the theory of killer acquisitions supported by empirical facts? Focusing on past investigations by the European Commission in information technology industries, this article studies whether acquisitions by large technology companies reduce competition by eliminating future rivalry. Despite the small sample size, the findings suggest that none of the reviewed transaction was followed by the disappearance of the target's products, a weakening of competing firms, and/or a post-merger lowering or absence of entry and innovation.

Keywords: killer acquisitions; case study; dynamic competition; innovation; mergers and acquisitions; nascent competitors (search for similar items in EconPapers)
Date: 2024
Note: View the original document on HAL open archive server: https://hal.science/hal-05308625v1
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Published in Antitrust Law Journal, 2024, 86 (3), pp.647-695. ⟨10.2139/ssrn.4407333⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05308625

DOI: 10.2139/ssrn.4407333

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