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Takeover incentives and defence with Cross Partial Ownerships

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  • Serbera, Jean-Philippe
  • Fry, John

Abstract

We analyse takeovers in an industry with bilateral capital-linked firms in Cross Partial Ownerships (CPO). We find conditions for stable equilibria in takeovers with the target being inside or outside of a CPO arrangement. The impact of CPO upon profitability for the raider, the target and the rest of the industry is two-sided in a Cournot setting and depends on the value of CPO and on the type of target. CPO shows anticompetitive effects by facilitating mergers in most cases. However, a protective threshold (takeover ratio

Suggested Citation

  • Serbera, Jean-Philippe & Fry, John, 2017. "Takeover incentives and defence with Cross Partial Ownerships," MPRA Paper 82074, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82074
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Takeovers; Partial Ownership; Mergers; Market Power; Minimum Takeover Ratio;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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