Takeover incentives and defence with Cross Partial Ownerships

Jean-Philippe Serbera and John Fry

MPRA Paper from University Library of Munich, Germany

Abstract: We analyse takeovers in an industry with bilateral capital-linked firms in Cross Partial Ownerships (CPO). We find conditions for stable equilibria in takeovers with the target being inside or outside of a CPO arrangement. The impact of CPO upon profitability for the raider, the target and the rest of the industry is two-sided in a Cournot setting and depends on the value of CPO and on the type of target. CPO shows anticompetitive effects by facilitating mergers in most cases. However, a protective threshold (takeover ratio

Keywords: Takeovers; Partial Ownership; Mergers; Market Power; Minimum Takeover Ratio (search for similar items in EconPapers)
JEL-codes: G34 L22 L41 (search for similar items in EconPapers)
Date: 2017-10-18
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