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Upward Pricing Pressure in Partial Acquisitions: Application to the Essilor Case

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  • Jin Yangsoo

    () (Department of Economics, Sungshin Women’s University, 2 Bomun-ro 34da-gil, Seongbuk-gu, Seoul 136-742, Korea (Republic of))

Abstract

The price effects of a partial acquisition may be far more complex than those of a full merger. The discussion on this issue, however, has not been well developed in Asian countries, including Korea. However, a partial acquisition case occurred in Korea in which Essilor intended to acquire fifty-percent shares of its competitor, DM Optical. In this paper, we modify and reorganize theories of upward pricing pressure (UPP) in partial acquisitions and apply them to this case. This paper, therefore, intends not only to initiate a discussion, but also to suggest an exemplary method to conduct UPP analysis in partial acquisition environments. Specifically, it will contribute to methodological advances by analyzing the case in a fashion that circumvents limitations of time and data, the main obstacles merger reviewers often face, in practice.

Suggested Citation

  • Jin Yangsoo, 2016. "Upward Pricing Pressure in Partial Acquisitions: Application to the Essilor Case," Asian Journal of Law and Economics, De Gruyter, vol. 7(3), pages 343-367, December.
  • Handle: RePEc:bpj:ajlecn:v:7:y:2016:i:3:p:343-367:n:1
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    References listed on IDEAS

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    1. Werden, Gregory J, 1996. "A Robust Test for Consumer Welfare Enhancing Mergers among Sellers of Differentiated Products," Journal of Industrial Economics, Wiley Blackwell, vol. 44(4), pages 409-413, December.
    2. Richard Schmalensee, 2009. "Should New Merger Guidelines Give UPP Market Definition?," Antitrust Chronicle, Competition Policy International, vol. 12.
    3. Bresnahan, Timothy F. & Salop, Steven C., 1986. "Quantifying the competitive effects of production joint ventures," International Journal of Industrial Organization, Elsevier, vol. 4(2), pages 155-175, June.
    4. Brito, Duarte & Ribeiro, Ricardo & Vasconcelos, Helder, 2014. "Measuring unilateral effects in partial horizontal acquisitions," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 22-36.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Essilor case; partial acquisition; upward pricing pressure;

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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