Unilateral Effects Screens for Partial Horizontal Acquisitions: The Generalized HHI and GUPPI

Duarte Brito, Osório, António (António Miguel), Ricardo Ribeiro and Helder Vasconcelos

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: Recent years have witnessed an increased interest, by competition agencies, in assessing the competitive effects of partial acquisitions. We propose a generalization to a partial horizontal acquisition setting of the two most traditional indicators used to screen unilateral anti-competitive effects: the Helfindahl- Hirschman Index and the Gross Upward Price Pressure Index. The proposed generalized indicators can deal with all types of acquisitions that may lessen competition in the industry: acquisitions by owners that are internal to the industry (rival firms) and engage in cross-ownership, as well as acquisitions by owners that are external to the industry and engage in common-ownership. Furthermore, these indicators can deal with direct and indirect acquisitions, which may or may not correspond to control, and nest full mergers as a special case. We provide an empirical application to several acquisitions in the wet shaving industry. The results seem to suggest that (i) a full merger induces higher unilateral anti-competitive effects than a partial controlling acquisition involving the same firms, (ii) a partial controlling acquisition induces higher unilateral anti-competitive effects than a partial non-controlling acquisition involving the same firms and the same financial stakes, and (iii) an acquisition by owners that are internal to the industry induces higher unilateral anti-competitive effects than an acquisition (involving the same firms and the same stakes) by external owners that participate in more than one competitor firm. JEL Classification: L13, L41, L66 Keywords: Antitrust, Partial Horizontal Acquisitions, Oligopoly, Screening Indicators, HHI, GUPPI

Keywords: Oligopolis; Monopolis; 33 - Economia (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Unilateral effects screens for partial horizontal acquisitions: The generalized HHI and GUPPI (2018)
Working Paper: Unilateral Effects Screens for Partial Horizontal Acquisitions: The Generalized HHI and GUPPI (2015)
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