Post-Merger Product Repositioning: An Empirical Analysis

31 Pages Posted: 23 Sep 2020

See all articles by Enghin Atalay

Enghin Atalay

Federal Reserve Banks - Federal Reserve Bank of Philadelphia

Alan Sorensen

affiliation not provided to SSRN

Wanjia Zhu

affiliation not provided to SSRN

Christopher Sullivan

University of Wisconsin - Madison - Department of Economics

Date Written: September, 2020

Abstract

This paper investigates firms’ post-merger product repositioning. We compile information on conglomerate firms’ additions and removals of products for a sample of 61 mergers and acquisitions across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by the merging firms, and the products that are dropped tend to be particularly dissimilar to the firms’ existing products. These results are consistent with theories of the firm that emphasize core competencies linked to particular segments of the product market.

Suggested Citation

Atalay, Enghin and Sorensen, Alan and Zhu, Wanjia and Sullivan, Christopher, Post-Merger Product Repositioning: An Empirical Analysis (September, 2020). FRB of Philadelphia Working Paper No. 20-36, Available at SSRN: https://ssrn.com/abstract=3696732 or http://dx.doi.org/10.21799/frbp.wp.2020.36

Enghin Atalay (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Alan Sorensen

affiliation not provided to SSRN

No Address Available

Wanjia Zhu

affiliation not provided to SSRN

No Address Available

Christopher Sullivan

University of Wisconsin - Madison - Department of Economics ( email )

William H. Sewell Social Science Building
1180 Observatory Drive
Madison, WI 53706-1393
United States

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