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

John Barrios and Thomas G. Wollmann

No 29655, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Antitrust authorities search public documents to discover anticompetitive mergers. Thus, investor disclosures may alert them to deals that would otherwise escape scrutiny, creating disincentives for managers to divulge transactions. We study this behavior in publicly traded US companies. First, we estimate a regression discontinuity that exploits mandatory disclosure thresholds stipulated by securities law. We find that releasing information to investors poses antitrust risk. Second, we present a method for measuring undisclosed merger activity that relies on financial accounting reporting requirements. We find that undisclosed mergers total $2.3 trillion between 2002 and 2016.

JEL-codes: G3 G34 L0 L4 L40 M4 (search for similar items in EconPapers)
Date: 2022-01
New Economics Papers: this item is included in nep-acc, nep-cfn, nep-com, nep-ind and nep-reg
Note: CF IO
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