WORKING PAPER Merger Wars: Bidding for Complementary Assets

نویسندگان

  • Lynne M. Pepall
  • Daniel J. Richards
چکیده

Merger Wars: Bidding for Complementary Assets By Lynne M. Pepall and Daniel J. Richards Department of Economics Tufts University Medford, MA 02155 e-mail: [email protected] [email protected] We examine the bidding competition for a set of complementary assets arising between two firms who also compete in a differentiated product market. The bidding contest takes the form of an acquisition battle for a third firm initially holding the assets. Depending on the nature of product competition between the bidding firms, either both bidding firms are made worse off by the availability of these assets or, paradoxically, the firm winning the bidding contest is less profitable than is the firm losing it. Our analysis is relevant to the many recent mergers in telecommunications, finance, and transportation, e.g., Viacom’s purchase of CBS.

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

منابع مشابه

Sky Wars: the Attempted Merger of Echostar and Directv (2000)

Introduction On October 28, 2001, EchoStar Communications Corporation announced its intention to acquire the assets of Hughes Electronics Corporation. At the time of the proposed merger EchoStar operated the Dish Network and DirecTV was operated by Hughes, which was then a wholly owned subsidiary of General Motors. EchoStar and DirecTV were the only direct broadcast satellite (DBS) companies th...

متن کامل

In Search of Strategic Assets through Cross-Border Merger and Acquisitions: Evidence from Chinese Multinational Enterprises in Developed Economies

Drawing on multiple cases of cross-border merger and acquisitions (CBMAs) by Chinese multinational enterprises (CMNEs), we investigate their search of strategic assets in developed economies (DEs). It is a received view that CMNEs use CBMAs to access strategic assets in DEs so as to address their latecomer disadvantages and competitive weakness. This paper aims to identify the nature of strateg...

متن کامل

Swedish School of Economics and Business Administration the Yrjö Jahnsson Working Paper Series in Industrial Economics

This paper starts from a recent case to study how merger analysis in Europe may potentially be improved through simulation analysis. Starting from the geographic market definition in the Merger Decision, we formulate and estimate an oligopoly model with differentiated products. The model is simulated to account for the changed multiproduct ownership structure after the merger. We show how our f...

متن کامل

Privatization and Foreign Competition

This paper determines the equilibrium market structure in a mixed international oligopoly, where the state assets are sold at an auction. The model suggests that low greenÞeld costs and low trade costs induce foreign acquisitions. The intuition is that domestic Þrms can then not prevent foreign Þrms from becoming strong competitors and thus, their willingness to pay for the state assets is low....

متن کامل

Why Mergers Fail

A number of empirical studies have shown that negative abnormal returns often result shortly after a once promising merger is consummated. There are few consistent explanations, however, as to why so many mergers result in such poor performance. This paper sheds light on this issue by examining the effect that structural factors (including market concentration and R&D intensity) have on post-me...

متن کامل

ذخیره در منابع من


  با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

عنوان ژورنال:

دوره   شماره 

صفحات  -

تاریخ انتشار 2000