Private equity firms (PE firms) have become common owners of established firms in concentrated markets. We show that the threat of a PE acquisition can trigger incumbent mergers in an otherwise merger-stable industry. This can help antitrust authorities maximize consumer surplus because previously privately unprofitable – but consumer surplus-enhancing – mergers now take place. We thus predict that merger waves among incumbents should follow the development of a local PE industry.
Referens:
Norbäck, Pehr-Johan, Lars Persson och Joacim Tåg (2018),
"Threatening to Buy: Private Equity Buyouts and Antitrust Policy".
Economics Letters
164(Mars),
31–34.