This paper gathers evidence on apparent discrepancies between EU decisions and stock market's anticipations of the anti-competitive consequences of particular mergers. We consider a sample of about 100 mergers, which include all phase II cases, and explore some of the factors that may account for such discrepancies. Overall, we find a low frequency of type I discrepancies, i.e. relatively few instances where the Commission has prohibited a merger that the market had anticipated as being pro-competitive. By contrast, we observe a high frequency of type II discrepancies, i.e. relatively numerous instances where the Commission failed to block or to impose remedies on mergers that the market had anticipated to be anti-competitive. We argue that type II discrepancies could be associated with the scope of the dominance concept, the lack of an explicit efficiency defence or the political economy of merger control, such that the Commission has not pursued the objective that it has been assigned. By contrast, type I discrepancies can only be associated with the political economy of merger control. Considering the pattern of discrepancies (across countries, across incentives to influence the Commission and over time), some preliminary observations reveal that competitors may play an important role in favour of anti-competitive deals but surprisingly not against pro-competitive mergers, that discrepancies are more frequent in phase I and possibly when large countries are involved.
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Paper provided by Economics Section, The Graduate Institute of International Studies in its series HEI Working Papers with number
10-2002.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2000.
"Efficiency Gains from Mergers,"
CIG Working Papers
FS IV 00-09, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
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