Threatening to buy : Private equity buyouts and antitrust policy
(2018) In Economics Letters 164. p.31-34- Abstract
Private equity firms (PE firms) have become common owners of established firms in concentrated markets. We show that the threat of a PE acquisition can trigger incumbent mergers in an otherwise merger-stable industry. This can help antitrust authorities maximize consumer surplus because previously privately unprofitable – but consumer surplus-enhancing – mergers now take place. We thus predict that merger waves among incumbents should follow the development of a local PE industry.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/515b61f2-59a8-4192-ac73-55745c060770
- author
- Norbäck, Pehr Johan
; Persson, Lars
LU
and Tåg, Joacim
LU
- publishing date
- 2018-03-01
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Antitrust policy, M&As, Private equity, Temporary ownership, G32, G34, L13, L22, L40
- in
- Economics Letters
- volume
- 164
- pages
- 4 pages
- publisher
- Elsevier
- external identifiers
-
- scopus:85044677128
- ISSN
- 0165-1765
- DOI
- 10.1016/j.econlet.2017.12.027
- language
- English
- LU publication?
- no
- id
- 515b61f2-59a8-4192-ac73-55745c060770
- date added to LUP
- 2020-01-23 15:51:47
- date last changed
- 2022-03-18 07:13:20
@article{515b61f2-59a8-4192-ac73-55745c060770, abstract = {{<p>Private equity firms (PE firms) have become common owners of established firms in concentrated markets. We show that the threat of a PE acquisition can trigger incumbent mergers in an otherwise merger-stable industry. This can help antitrust authorities maximize consumer surplus because previously privately unprofitable – but consumer surplus-enhancing – mergers now take place. We thus predict that merger waves among incumbents should follow the development of a local PE industry.</p>}}, author = {{Norbäck, Pehr Johan and Persson, Lars and Tåg, Joacim}}, issn = {{0165-1765}}, keywords = {{Antitrust policy; M&As; Private equity; Temporary ownership; G32; G34; L13; L22; L40}}, language = {{eng}}, month = {{03}}, pages = {{31--34}}, publisher = {{Elsevier}}, series = {{Economics Letters}}, title = {{Threatening to buy : Private equity buyouts and antitrust policy}}, url = {{http://dx.doi.org/10.1016/j.econlet.2017.12.027}}, doi = {{10.1016/j.econlet.2017.12.027}}, volume = {{164}}, year = {{2018}}, }