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The article defines the market and patent-related mergers under the 2010 Horizontal Merger Guidelines by Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice (DOJ). It proposes antitrust and patent laws related to horizontal mergers involving the patent right. It suggests that the FTC and DOJ should consider the technology and innovation market concepts in patent-related mergers and acquisition cases, illustrating the court case F.T.C. v. Lundbeck, Inc.

Fruit and vegetable marketing organization the Greenery has experienced various governance structure changes, like horizontal merger, forward integration, and the emergence of grower associations. A multilateral incomplete contracting model is presented to account for these changes by analysing the interactions between pooling, access, and countervailing power. This model does not only explain the changes at the Greenery, but it contributes also to the design of efficient channel governance. [ABSTRACT FROM AUTHOR]

In August, 2010, the Antitrust Division and the Federal Trade Commission issued new Guidelines for assessing horizontal mergers under the antitrust laws. These Guidelines were long awaited not merely because of the lengthy interval between them and previous Guidelines but also because enforcement policy had drifted far from the standards articulated in the previous Guidelines. The 2010 Guidelines are distinctive manly for two things. One is briefer and less detailed treatment of market delineation. The other is an expanded set of theories of harm that justify preventing mergers or reversing mergers that have already occurred. The 2010 Guidelines reflect a growing belief that in markets where product differentiation is minimal competition tends to be robust and the structural presumptions stated in previous Guidelines were too harsh. By contrast, where product differentiation is substantial the Guidelines' approach tended to define markets too broadly, overlooking significantly anticompetitive possibilities. Under the 2010 Guidelines unilateral effects analysis relevant markets can be very small, often limited to three or four firms, and excluding some obvious substitutes. Markets in merger analysis are not defined for their own sake, however, but rather to ascertain whether a particular alteration in market structure covered by the merger provisions will be likely to facilitate a price increase. The 2010 Guidelines address four substantive merger concerns: exclusion, restraints on innovation, unilateral effects, and coordinated effects. The Guidelines have a separate section on mergers limiting 'innovation and product variety,' treated mainly in the category of unilateral effects. The 2010 Guidelines are more flexible than previous Guidelines and also more catholic about the types of harms that mergers might cause and the techniques that can be used to assess them. Older Guidelines were excessively wed to methodologies that were at the forefront of applied merger analysis when they were drafted, but that tended to make the Guidelines obsolete as new methodologies became available. Not only do methodologies change, they are also specific to the situation. Further, they tend to be well developed in the literature and accessible to experts consulted by those defending a merger as well as to the government economists who employ them. To be sure, there is a tradeoff between flexibility and guidance. Often we can have more of one only by giving up some of the other, and that tradeoff is clearly present in the 2010 Guidelines. [ABSTRACT FROM AUTHOR]

We use a non-spatial (Chamberlinian) product differentiation model to analyze the welfare effects of horizontal mergers with quantity competition. We argue that (i) mergers can be welfare enhancing if the degree of product differentiation increases after the merger; and, (ii) privately profitable mergers can also increase welfare. Consequently, in this paper we demonstrate that the degree of product differentiation is a crucial factor to assess the welfare effects of a merger. [ABSTRACT FROM AUTHOR]

The article focuses on the major revision of the US Horizontal Merger Guidelines which was issued by the US Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) on August 2010 in the U.S. It notes that the revisions were created to have the guidelines that will reflect to the FTC's and DOJ's current approach to merger reviews. It also explores the revision process of the guidelines, the cooperation and significant changes in the revised guidelines.

This article discusses the application of the European Commission (EC) for the nonhorizontal merger Guidelines in the European Union. It states that the Guidelines were adopted by the EC on November 28, 2007 which are part of the implementation of an effects-based analysis framework by the Directorate-General (DG) for Competition. It states that the guidelines were essential in the analysis of the issues concerning the assessment of the effects of nonhorizontal mergers on consumers.

This article discusses the importance of regulating horizontal mergers for the benefit of consumer welfare in Europe. It highlights the effects of horizontal mergers on consumer welfare which include price increases, reduction in product variety and the rise of cost efficiencies. It outlines the arguments over the implementation of consumer welfare standards and the enactment of legislation for merger control.

Different merger and acquisition strategies by Quebecor Media-both vertical and horizontal integration in the news sector, followed in the 90S by a diversification of the group's media ownership in the Web and television sectors--have led to the implementation of convergence policies for content and journalistic labour in and between each of the chains owned by the conglomerate in Quebec and the rest of Canada, with at the heart of this strategy the Web portal Canoe. These strategies are at their most advanced in the news chain Sun Corporation where in 2009 Quebecor created its own newswire (QMI) and rationalized its coverage of events by journalists. [ABSTRACT FROM AUTHOR]

We analyze the optimal dynamic policy of an antitrust authority toward horizontal mergers when merger proposals are endogenous and occur over time. Approving a currently proposed merger may affect the profitability and welfare effects of potential future mergers, whose characteristics may not yet be known. We identify conditions under which discounted expected consumer surplus is maximized by using a completely myopic merger review policy that approves a merger if and only if it does not lower consumer surplus given the current market structure. We also discuss a number of extensions as well as factors that undermine the optimality of myopic merger review policies. [ABSTRACT FROM AUTHOR]

In this paper we analyze two-firm horizontal mergers between an inefficient leader and an efficient follower. The merger is profitable and may decrease price (increase welfare) if the market size is large enough. Furthermore, a merger involving a leader which decreases price hurts outsider firms and therefore resolves the free-rider component of the merger paradox. Finally, it is shown that, when the market is large, these mergers always increase welfare regardless of the size of the cost asymmetry between leader and follower. [ABSTRACT FROM AUTHOR]

The article focuses on the issues concerning the arguments which should be dealt by the merging parties relative to the horizontal merger cases brought in by the government. It examines the horizontal merger case in conjunction to the role played by the entry issues on the case. It highlights the examination of the entry issues conducted by the Antitrust Commission and Division. It explores the factors which identify how the courts distribute the persuasion issues on the merging parties.

In this paper we propose a method to evaluate the effectiveness of U.S. horizontal merger policy and apply it to the study of five recently consummated consumer products mergers. We select the mergers from those that, from the public record, seem most likely to be problematic. Thus, we estimate an upper bound on the likely price effect of completed mergers. Our study employs retail scanner data and uses familiar panel data program evaluation procedures to measure price changes. Our results indicate that four of the five mergers resulted in some increases in consumer prices, while the fifth merger had little effect. [ABSTRACT FROM AUTHOR]

The evolution of organisations that work in multinational environments has considerably altered their production strategies. One of the consequences has been the appearance of global manufacturing virtual networks (GMVNs), which include all kinds of production centres. These networks establish a new type of vertical and horizontal collaboration between independent companies or even competitors who launch occasional collaborations on projects they could not take on individually. The purpose of this paper is to analyze the main reasons that determine the formation of GMVNs as well as the strategy of the companies involved in these organizations and how GMVN will evolve in the future. For that purpose, a conceptual framework is proposed based on four network features: strategy, structure, communication systems and culture. This work will delve into the strategy network feature by applying a strategic positioning model to a practical case in the aeronautical industry to gain a better understanding of how GMVNs work, its effectiveness by clarifying and putting these organisations in perspective and how they may evolve in the future. [ABSTRACT FROM AUTHOR]

In current horizontal merger policy in the US and the EU an explicit efficiency defense is allowed. On both sides of the Atlantic mergers are unconditionally approved if internal efficiencies are sufficient to reverse the mergers' potential to harm consumers in the relevant market. Current merger policy is implicitly based on the assumption that rational managers will only propose privately profitable mergers. In this paper I will show that the empirical evidence on merger performance suggests that this assumption can't be sustained. Managers do propose uneconomic mergers, motivated by non-wealth maximizing behavior. To tackle this problem I argue that efficiencies should not only be used as an efficiency defense, but efficiencies should work both ways. To avoid type I and type II errors the competition authorities in the US and the EU should undertake a sequential efficiency test in their assessment of specific mergers. [ABSTRACT FROM AUTHOR]

Using a standard differentiated goods quantity competition setting, we show three facts about horizontal two-firm mergers that are not true for a homogeneous goods Cournot market. First, merger of two firms is profitable for the merging firms provided that goods are sufficiently distant substitutes. Second, merging of two firms can lead to more two-firm mergers. Third, an initially non-profitable two-firm merger can occur in anticipation of subsequent mergers. These facts imply that mergers are more likely to occur in differentiated goods markets than in homogeneous goods markets. [ABSTRACT FROM AUTHOR]

Antitrust authorities regard the possibility of post-merger entry and merger-generated efficiencies as two factors that may counteract the negative effects of horizontal mergers. This article shows that in differentiated oligopolies with linear demand, all entry-inducing mergers harm consumer welfare. This is because if there is entry following a merger, it implies that the merger-generated efficiencies were not sufficiently large. Mergers which induce exit, owing to sufficiently high cost savings, always improve consumer welfare. [ABSTRACT FROM AUTHOR]

In horizontal mergers, concentration is often measured with the Hirschman–Herfindahl Index (HHI). This index yields the price–cost margins in Cournot competition. In many modern merger cases, both buyers and sellers have market power, and indeed, the buyers and sellers may be the same set of firms. In such cases, the HHI is inapplicable. We develop an alternative theory that has similar data requirements as the HHI, applies to intermediate good industries with arbitrary numbers of firms on both sides, and specializes to the HHI when buyers have no market power. The more inelastic is the downstream demand, the more captive production and consumption (not traded in the intermediate market) affects price–cost margins. The analysis is applied to the merger of the gasoline refining and retail assets of Exxon and Mobil in the western United States. ( JEL L13, L41) [ABSTRACT FROM AUTHOR]

We show that in a three-firm infinitely repeated Cournot game, there exists a stick and carrot strategy equilibrium in which an exogenous bilateral horizontal merger is profitable and the incentive to remain out of the merger disappears. In this sub-game perfect equilibrium, the merged entity produces the duopoly quantity and the outsider limits its production to half the duopoly quantity. Our stick and carrot strategy entails that the merged entity threatens to produce twice the triopoly quantity for two periods if the outsider does not produce half the duopoly quantity. In this equilibrium, the aggregate price remains high enough to make the merger profitable for the insiders. Also, the quantity produced by the outsider is sufficiently low to eliminate the difference between the profit of the outsider and the merging firm. [ABSTRACT FROM AUTHOR]

This article proposes a classification of causes of mergers by theoretical currents and assesses their applicability in the Colombian case of the Davivienda - Bansuperior - Bancafé merger. Guided by the three theoretical currents (economies of scale and scope, transaction costs, and the resource and capability-based approach), the theoretical context discusses 17 typologies of causes of mergers. The method used was a case study and information was gathered from diverse secondary sources and in-depth interviews with top management. The Likert scale was applied to classify attitudes. This case helped verify some of the reasons presented in the literature on the topic. It also confirmed that one reason for the horizontal merger of a company belonging to a business group is to acquire benefits for the other companies in the group, through savings in transaction costs derived from the vertical ties generated between the merged company and the other group companies. An inviting line of future research is the specific weight of the vertical causes of a horizontal merger. [ABSTRACT FROM AUTHOR]

Mergers and acquisitions (M&As) have been actively carried out in the petrochemical industry. However, the synergy created by the merger of petrochemical companies has seen relatively little study, despite being the primary goal of a merger. This study deals with the horizontal merger of petrochemical companies located within a single complex. Synergies considered in this work stem from integration of the process network and the utility plant, reduction of fixed costs, and contracts in purchasing and selling. A novel mathematical model that represents the operation of a process network and a utility plant and the decisions for purchasing and selling contracts is formulated. Four contracts for purchasing and selling are considered. The proposed model is applied to three Korean companies at a naphtha cracking center (NCC) located in the same industrial complex. The results show that synergy effects from integration of the process network and the utility system, reduction of fixed costs, and increased market share together increase profit by 50%. [ABSTRACT FROM AUTHOR]

In this paper we evaluate the effects of horizontal mergers in a vertical relationship. Each downstream firm can create autonomous divisions. We show that an infinitesimal merger of downstream firms may exhibit a positive welfare effect if the upstream and downstream sectors are sufficiently unconcentrated. However, any merger of upstream firms reduces social welfare. Moreover, a decrease in the concentration in the upstream stage (respectively downstream stage or non-merging stage) makes the welfare effects of the merger in the upstream stage (respectively downstream stage or non-merging stage) less negative (respectively ambiguous or ambiguous). [ABSTRACT FROM AUTHOR]

Abstract: In this paper, we present a new theoretical framework for the quantification of strategic advantages associated with horizontal mergers through the integration of supply chain networks. The framework is a system-optimization one in which each firm is represented as a network of economic activities associated with manufacturing, distribution, and storage and with explicit capacities imposed on the links. We present the models pre- and post-horizontal mergers and define a measure for the quantification of the gains, if any, associated with the mergers. We illustrate the framework with several numerical examples. For simple classes of mergers we derive formulae for the strategic advantages. [Copyright &y& Elsevier]

This paper introduces the Werden-Froeb Index (WFI) to assist in evaluating merger-specific efficiencies in horizontal mergers. The index measures the weighted average reduction in marginal costs required to restore pre-merger equilibrium prices and quantities after the (full or partial) merger is consummated. The WFI is well defined, objective and robust, and it has relatively low information requirements. We propose to use the index as a natural complement to concentration measures such as the Hirschmann-Herfindahl Index in the assessment of horizontal mergers. [ABSTRACT FROM AUTHOR]

This paper analyzes the role of Information Technology (IT) in the integration processes in horizontal mergers and acquisitions. According to conventional wisdom, a rapid integration of IT systems would facilitate the integration process of the acquired and acquired companies. However, the results of our case studies show that a rapid unification of IT systems is not always the best option. [ABSTRACT FROM PUBLISHER]

The profitability of horizontal mergers is investigated in a situation in which firms face a production shock and therefore are uncertain about their future costs. I show that, due to production rationalization, small-scale mergers can be profitable if the uncertainty is large. The efficiency gain in production also implies benign welfare consequences. Under cost uncertainty, a profitable merger always improves social welfare if no more than half of the industry's firms are allowed to merge. Finally, I show that the incentives to merge depend on the information structure. Firms are less likely to merge when they possess more information. [ABSTRACT FROM AUTHOR]

Horizontal mergers are often driven by the desire to exploit R&D complementarities. We investigate the positive features of such a merger when oligopolists compete both in process R&D and on the product market. For a non-trivial degree of R&D complementarity, we show that the merger has the following intuitively appealing features independently of the strategic variable in market competition: insiders benefit; outsiders are harmed; and insiders end up larger than outsiders. These results contrast with those of traditional models of merger to achieve market power alone, which are known to be counterintuitive and sensitive to the mode of product market competition. [ABSTRACT FROM AUTHOR]

This paper extends Farrell and Shapiro (1990) and Levin (1990) by providing necessary and sufficient conditions for horizontal mergers to be both profitable and welfare-enhancing when market demand and firms' costs are linear. We show that profitable, welfare-enhancing mergers are likely to involve firms whose combined pre-merger market shares exceed 50%, and that mergers may be profitable and welfare-enhancing even when they do not generate any direct cost efficiencies. Our results suggest that any approach to evaluating the welfare effects of horizontal mergers which does not account for industry-wide strategic effects is seriously flawed. [ABSTRACT FROM AUTHOR]

We examine the profitability of cross-ownership in a nonrenewable resource oligopolistic industry where firms compete as Cournot rivals. Assuming a subset of the oligopolists own a share in each other's profits, we show that a symmetric cross-ownership can be profitable for any number of participating firms, provided that the initial resource stock owned by each firm is small enough. This is in sharp contrast with the static case where for any levels of non-controlling minority shareholdings, a symmetric cross-ownership is never (always) profitable if the relative number of participating firms is below (above) some lower (upper) threshold. When the relative number of participating firms is in between the two thresholds, profitability of cross-ownership depends on the level of shareholdings. We also highlight that cross-ownership can be preferable to a horizontal merger in terms of Cournot competition. Not only is it more profitable to do so, more importantly, it constitutes a shrewd strategy to avoid the possible legal challenges. Finally, we show that cross-ownership may turn out to be relatively less detrimental to society in a nonrenewable resource industry than other industries where resource constraints are absent. Thus, a specific analysis is needed when dealing with industries where resource constraints play an important role. [ABSTRACT FROM AUTHOR]

We examine the implications of the 1992 Horizontal Merger Guidelines for the hospital industry and subsequent policy statements that were developed for health care providers. Application of antitrust policy to hospitals has raised several concerns, mainly because many communities have few hospitals and economic forces in the industry are accelerating interest in intramarket mergers and provider network development. We address several issues, including the standing of hospitals relative to the market concentration thresholds of the merger guidelines, market concentration compared among challenged and unchallenged mergers of the 1980s, findings of previous research about the relationship between market concentration and competition in hospital markets, and differences in characteristics other than market concentration that are relevant to the merger guidelines among challenged and unchallenged mergers. We found that (1) the specific standards articulated in the merger guidelines do not provide good predictability of when a hospital merger challenge would occur, and (2) comparisons of challenged and unchallenged mergers in similarly structured markets suggest that enforcement actions may deviate in practice from the enforcement principles of the merger guidelines. We consider several options for refining antitrust enforcement policy. Refinement of enforcement policies is important given the industry restructuring that is likely through health care reform. [ABSTRACT FROM AUTHOR]

The article discusses the new horizontal merger guidelines proposal of the National Association of Attorneys General (NAAG). The guidelines are designed to achieve uniformity of enforcement in governmental challenges to anticompetitive acquisitions, and to call for an analysis of a proposed merger in terms of effects on concentration in both geographic and product markets. The NAAG defines the product market as the product produced in common by merging firms plus comparably priced substitutes, and the geographic market as the area from which customers of the merging parties buy at least 75% of their supplies. The author contrasts these new guidelines with that of the existing guidelines of the U.S. Antitrust Division.

The article discusses the importance of the degree of relatedness in mergers and acquisitions (M&As) in the hospital industry. It states that the degree of relatedness of the two companies affects the level and areas of integration and the type of deal. The types of M&As such as horizontal, vertical, or conglomerate, are discussed. Among these types, horizontal mergers, wherein the companies are competitors operating in the same industry and on the same level, will reportedly have the greatest chance of success.

Solution of the plane problem of the scattering of a passive impurity discharged by a source, which is located in a water-bearing horizon and which is circumvented by a seepage flow, is examined. The results obtained make it possible to estimate the degree of contamination and the configuration of the region contaminated. [ABSTRACT FROM AUTHOR]