Common Ownership and Merger Control Enforcement

Ioannis Kokkoris (ed.) Research Handbook in Competition Enforcement (Edward Elgar Publishing, Forthcoming)

IESE Business School Working Paper

45 Pages Posted: 9 Apr 2021

See all articles by José Azar

José Azar

University of Navarra, IESE Business School; CEPR

Anna Tzanaki

Lund University - Faculty of Law; University College London - Centre for Law, Economics and Society

Date Written: April 8, 2021

Abstract

Common ownership fundamentally upsets the well-settled merger enforcement ecosystem. Not only it challenges basic principles informing merger policy such as the presumed profitability of mergers for the merging firms and the merger-specificity of potential efficiencies but also it works against implementing tools and presumptions in merger practice such as concentration indices for screening out unproblematic from potentially harmful mergers. The incremental effect of a merger taking place in an environment of common ownership may be either smaller or larger by comparison to a counterfactual with no common ownership. The sign and size of the merger effect will depend on the relative post-merger stakes of the common shareholders in the merging firms vis-à-vis any stakes in non-merging rivals in the same industry and on the specific financial structure of the merger deal. Accordingly, merger enforcement should shift towards more fact-specific analysis and antitrust authorities may want to consider developing guidelines.

Keywords: common ownership, horizontal shareholding, merger control, antitrust, competition, institutional investors

JEL Classification: D21, D22, D43, D60, G23, G34, K21, L10, L13, L21, L22, L40, L41

Suggested Citation

Azar, José and Tzanaki, Anna, Common Ownership and Merger Control Enforcement (April 8, 2021). Ioannis Kokkoris (ed.) Research Handbook in Competition Enforcement (Edward Elgar Publishing, Forthcoming), IESE Business School Working Paper , Available at SSRN: https://ssrn.com/abstract=3822444

José Azar

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

CEPR ( email )

London
United Kingdom

HOME PAGE: http://https://sites.google.com/site/joseazar/

Anna Tzanaki (Contact Author)

Lund University - Faculty of Law ( email )

Lilla Gråbrödersgatan 4
Lund, 222 22
Sweden

University College London - Centre for Law, Economics and Society ( email )

Bentham House
Endsleigh Gardens
London, WC1H 0EG
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
148
Abstract Views
484
rank
239,599
PlumX Metrics