Claim efficiencies or offer remedies? An analysis of litigation strategies in EC mergers
AbstractEfficiency defence and merger remedies are key components in most merger control regimes. Although in many jurisdictions both the provision of efficiency-related evidence and remedy offers are at the merging firms' discretion, most previous works have only analysed them separately. This paper is an attempt to empirically model the system of decisions that firms face in merger litigation where they are allowed to choose what combination of efficiency claims and settlement offers to make. The main novelty of this work is the use of data from company reports on the merger-generated synergy expectations signalled to shareholders, which allows the direct empirical testing of some of the assumptions and findings from previous works. Evidence is presented that the current EC merger control regime is incapable of extracting information from firms on their efficiency expectations and the identity and experience of the legal advisor plays a key role in this; that pre-merger synergy expectations enhance the willingness to offer remedies; and finally, that the cost of delay plays a central role in designing firms' litigation strategy, especially when these costs exceed the cost of the remedy.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 30 (2012)
Issue (Month): 6 ()
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Web page: http://www.elsevier.com/locate/inca/505551
Merger litigation; Merger remedies; Synergies; Efficiency defence;
Find related papers by JEL classification:
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
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