Waiting to Merge

Eileen Fumagalli () and Tore Nilssen ()
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Eileen Fumagalli: IEFE, Università Bocconi, Milan

No 13/2008, Memorandum from Oslo University, Department of Economics

Abstract: We set up a sequential merger to study a firm's incentives to pass up on an opportunity to merge with another firm. We find that such incentives may exist when there are efficiency gains from a merger, firms are of different sizes, there is an anthitrust authority present to approve mergers, and there is sufficient alignment of interests between the antitrust authority and the firms. We point out three dstinctive motives for not merging: the external-effect motive, the bargaining-power motive, and the pill-sweetening motive.

Keywords: Mergers; merger incentives (search for similar items in EconPapers)
JEL-codes: G34 L11 L13 L41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2008-06-30
New Economics Papers: this item is included in nep-bec and nep-com
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Citations: View citations in EconPapers (3)

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