- TAKEOVER WAVES

Ramón Faulí-Oller ()
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Ramón Faulí-Oller: Universidad de Alicante

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: Horizontal takeovers often occur in waves. A sequence of takeovers is obtained in a Cournotsetting with cost asymmetries. They are motivated by two different reasons: (i) A low realizationof demand increases the profitability of takeovers. (ii) Takeovers raise the profitability of futuretakeovers. A possible explanantion of merger races is also obtained by showing that firms buyingin the first place pay a lower price for their targets.

Keywords: Takeovers; Antitrust; Demand. (search for similar items in EconPapers)
Pages: 26 pages
Date: 1999-12
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1999-30

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