Mergers by Partial Acquisition
This paper evaluates partial acquisition strategies. The model allows for buying a share of a firm before the actual acquisition takes place. Holding a share in a competing firm before the acquisition of another firm, outsider-toehold, eliminates the insiders' dilemma, i.e. profitable mergers do not occur. This strategy may thus be more profitable for a buyer than acquiring entire firms at once. Furthermore, the insiders' dilemma arises from the assumption of a positive externality on the outsider firm and acquiring an outsider-toehold is thus a signal of an anti-competitive merger.
|Date of creation:||20 Oct 2004|
|Date of revision:|
|Contact details of provider:|| Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden|
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
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.:
- Szidarovszky, F. & Yakowitz, S., 1982. "Contributions to Cournot oligopoly theory," Journal of Economic Theory, Elsevier, vol. 28(1), pages 51-70, October.
- Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 185-199.
- Ravid, S. Abraham & Spiegel, Matthew, 1999. "Toehold strategies, takeover laws and rival bidders," Journal of Banking & Finance, Elsevier, vol. 23(8), pages 1219-1242, August.
- S. Ravid & Matthew Spiegel, 1999. "Toehold Strategies, Takeover Laws And Rival Bidders," Yale School of Management Working Papers ysm112, Yale School of Management, revised 01 Jan 2001.
- Betton, Sandra & Eckbo, B Espen, 2000. "Toeholds, Bid Jumps, and Expected Payoffs in Takeovers," Review of Financial Studies, Society for Financial Studies, vol. 13(4), pages 841-82.
- Jeremy Bulow & Ming Huang & Paul Klemperer, 1996.
"Toeholds and Takeovers,"
- Morton I. Kamien & Israel Zang, 1988.
"The Limits of Monopolization Through Acquisition,"
802, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Kamien, Morton I & Zang, Israel, 1993. "Monopolization by Sequential Acquisition," Journal of Law, Economics and Organization, Oxford University Press, vol. 9(2), pages 205-29, October.
- Sanford J. Grossman & Oliver D. Hart, 1980. "Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 42-64, Spring.
- repec:hhs:iuiwop:563 is not listed on IDEAS
- Mark Bagnoli, Barton L. Lipman, 1988. "Successful Takeovers without Exclusion," Review of Financial Studies, Society for Financial Studies, vol. 1(1), pages 89-110.
- Tobias Lindqvist & Johan Stennek, 2005.
"The Insiders’ Dilemma: An Experiment on Merger Formation,"
Springer;Economic Science Association, vol. 8(3), pages 267-284, September.
- Lindqvist, Tobias & Stennek, Johan, 2001. "The Insiders' Dilemma: An Experiment on Merger Formation," Research Papers in Economics 2001:8, Stockholm University, Department of Economics.
- Lindqvist, Tobias & Stennek, Johan, 2001. "The Insiders' Dilemma: An Experiment on Merger Formation," Working Paper Series 563, Research Institute of Industrial Economics.
- Lindqvist, Tobias & Stennek, Johan, 2005. "The Insiders' Dilemma: An Experiment on Merger Formation," CEPR Discussion Papers 5016, C.E.P.R. Discussion Papers.
- Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, vol. 75(1), pages 219-27, March.
- Hogfeldt, Peter & Hogholm, Kenneth, 2000. "A law and finance theory of strategic blocking and preemptive bidding in takeovers," Journal of Corporate Finance, Elsevier, vol. 6(4), pages 403-425, December.
- Horn, Henrik & Persson, Lars, 2001.
"Endogenous mergers in concentrated markets,"
International Journal of Industrial Organization,
Elsevier, vol. 19(8), pages 1213-1244, September.
- Jennings, Robert H & Mazzeo, Michael A, 1993. "Competing Bids, Target Management Resistance, and the Structure of Takeover Bids," Review of Financial Studies, Society for Financial Studies, vol. 6(4), pages 883-909.
- Lindqvist, Tobias, 2005. "Acquisiton Strategies: Empirical Evidence of Outsider-Toeholds," Working Paper Series 634, Research Institute of Industrial Economics.
- Stulz, Rene M & Walkling, Ralph A & Song, Moon H, 1990. " The Distribution of Target Ownership and the Division of Gains in Successful Takeovers," Journal of Finance, American Finance Association, vol. 45(3), pages 817-33, July.
- Raymond Deneckere & Carl Davidson, 1985. "Incentives to Form Coalitions with Bertrand Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 473-486, Winter.
When requesting a correction, please mention this item's handle: RePEc:hhs:iuiwop:0630. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elisabeth Gustafsson)
If references are entirely missing, you can add them using this form.