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Conglomerate Mergers

ISSUES IN COMPETITION LAW AND POLICY, ABA Section of Antitrust Law, Vol. 2, p. 1503, 2008

50 Pages Posted: 8 Oct 2008 Last revised: 17 Feb 2009

Jeffrey Church

University of Calgary - Department of Economics

Date Written: 2008

Abstract

This chapter provides an overview of the economics of conglomerate mergers, with a focus on the potential for an increase in its product portfolio to lead to conduct that is anticompetitive. The economics of portfolio power indicates that a conglomerate merger that results in a firm posttransaction having a larger portfolio or product range may have the ability and incentive to engage in anticompetitive conduct. The key question for enforcement is how and whether to identify transactions that might give rise to an anticompetitive effect because of portfolio power, especially since most such transactions will be procompetitive. The chapter traces the evolution of conglomerate enforcement policy in the United States and Europe and considers the appropriateness of current enforcement policy.

Keywords: Conglomerate Merger

JEL Classification: L40

Suggested Citation

Church, Jeffrey, Conglomerate Mergers (2008). ISSUES IN COMPETITION LAW AND POLICY, ABA Section of Antitrust Law, Vol. 2, p. 1503, 2008. Available at SSRN: https://ssrn.com/abstract=1280524

Jeffrey Church (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

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