Staples and Office Depot: An Event-Probability Case Study
Review of Industrial Organization (2001) 19: 467. DOI: 10.1023/A:1012548125974
22 Pages Posted: 29 Mar 2019
Date Written: 1999
Investors in financial markets bet their dollars on whether a merger will raise or lower prices. Below, we apply an event-probability methodology to the proposed merger between Staples and Office Depot, which was challenged by the FTC and eventually withdrawn. In addition to a time-series regression, we also look at the effect of the merger in specific event windows. We find highly significant returns to the only rival firm in the relevant market. We estimate the price effect of the merger and find it highly consistent with independent estimates.
Keywords: stock market, event study, horizontal merger, antitrust, price effect
JEL Classification: G14, L41, L81
Suggested Citation: Suggested Citation