Mergers and partial ownership
We compare the profitability of a merger between two firms in which one firm fully acquires another and the profitability of a partial ownership arrangement in which the acquiring firm, although owning less than 100% of the acquired firm, is nevertheless able to obtain corporate control over all pri...
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| Veröffentlicht in: | European economic review 2011-10, Vol.55 (7), p.916-926 |
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| container_title | European economic review |
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| creator | Foros, Øystein Jarle Kind, Hans Shaffer, Greg |
| description | We compare the profitability of a merger between two firms in which one firm fully acquires another and the profitability of a partial ownership arrangement in which the acquiring firm, although owning less than 100% of the acquired firm, is nevertheless able to obtain corporate control over all pricing decisions. We find that joint profit can be higher in the latter case because it may result in a greater dampening of competition with respect to an outside competitor when the partial ownership arrangement is publicly observable. We also derive comparative statics on the prices of the acquiring firm, the acquired firm, and the outside firm and use them to explain puzzling features of the pay-TV markets in Norway and Sweden. |
| doi_str_mv | 10.1016/j.euroecorev.2011.03.001 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0014-2921 |
| ispartof | European economic review, 2011-10, Vol.55 (7), p.916-926 |
| issn | 0014-2921 1873-572X |
| language | eng |
| recordid | cdi_proquest_miscellaneous_896018772 |
| source | Elsevier ScienceDirect Journals |
| subjects | Acquisitions & mergers Buyouts Comparative analysis Corporate control Corporate finance Economic concentration Economic theory Financial control Financial management Financing methods Media Media economics Mergers Norway Ownership and control Profitability Studies Sweden Television |
| title | Mergers and partial ownership |
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