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The Changing Nature of Efficiencies in Mergers and in Merger Analysis
Abstract
Efficiencies have long been an important aspect of the antitrust analysis of mergers, but in recent years there have been certain noteworthy changes in the nature and analysis of efficiencies. One change appears to be the greater ability of the antitrust agencies to evaluate conventional efficiencies carefully and critically. This is demonstrated by the analysis of efficiencies associated with a number of recent proposed mergers before the antitrust and regulatory agencies. The second important change concerns the types of efficiencies typically claimed by merging firms. Whereas in earlier years these largely involved scale economies, they now more often focus on dynamic efficiencies, quality benefits, and vertical economies. This article discusses each of these in turn and argues that these newer types of efficiencies pose new and greater challenges for analysis.
... Previous literature has focused mainly on prices, competition or the relationship between power groups (lobbies) and governments (see, e.g., Brock, 2011;Whinston, 2006). Some authors found great heterogeneity in the effects of M&As, with different results depending on the studied countries (Ormosi et al., 2015;Kwoka, 2015). For this research we are more interested in the approach taken by other authors who focus on the transformations that can be transmitted, through M&As, from one country to another as network effects. ...
This article studies the transnational corporations' ownership and investment relationships between countries. Using Thomson Reuters SDC Platinum database on mergers and acquisitions and social network analysis techniques, the paper analyzes the international mergers and acquisitions network (IMAN), where vertices are 211 countries and edges represent the flow of international mergers and acquisitions between them. After elaborating the IMAN, it estimates the fitness of Borgatti and Everett (2000) core-periphery model to the network. Furthermore, it analyzes the fitness evolution between 1999 and 2013 and identifies core, semi-periphery and periphery countries. Results confirm the existence of a sharp and persistent core-periphery structure in the relations between countries. The core is made of only 15 nations that are almost completely interconnected among them and responsible for most of investments in transnational corporations. 41 semi-peripheral countries are relatively well connected while achieving about one fourth of investments. Finally, the remaining 155 nations in the periphery are mostly disconnected among them and only receive marginal investments from the core and semi-periphery nations. These results reveal that the ownership and control of the means of production at the global level is driven by polarized and unequal relationships between countries.
... Más recientemente, Ormosi, Mariuzzo y Hawell (2015) y Kwoka (2015Kwoka ( y 2013 han analizado conjuntos de evaluaciones ex post de F&A tanto en la Unión Europea como en los Estados Unidos (EE.UU.). El promedio del incremento de precios fue de 3.7%, con 14 casos que registraron un aumento del 8.2% y siete donde disminuyeron en 4.2%. ...
p align="center"> RESUMEN
El artículo presenta los factores explicativos de las fusiones y adquisiciones (F&A), mostrando la evolución, importancia relativa y sectores de destino de esas operaciones en 16 economías de América Latina en el periodo 1990-2014. Con base en un modelo integral, se evalúan los impactos de las F&A en el producto interno bruto (PIB), la vinculación entre el valor de las operaciones de F&A y las ganancias y con ello se determinan los impactos en el consumo privado, la inversión privada y las exportaciones. Se concluye que la elasticidad del PIB respecto al valor de las F&A es negativa en los casos de Chile, Perú y México. Más fusiones reconcentran el ingreso a favor de las ganancias e impactan de forma negativa en el producto. En el resto de las economías de la región estos resultados son ligeramente positivos o inciertos.
THE IMPACT OF MERGERS AND ACQUISITIONS ON INCOME DISTRIBUTION AND GROWTH IN LATIN AMERICA, 1990-2014
ABSTRACT
The paper reviews the factors accounting for Mergers and Acquisitions (M&As). It then discusses the evolution of M&A trades, their relative importance and the economic sectors that have been influenced by M&As in sixteen Latin-American economies during 1990-2014. An integral model is developed with the aim of assessing both the impact of M&As on Gross Domestic Product (GDP) and the link between the value of M&A transactions and profits so as to determine the effects of profit share changes on private consumption, private investment and exports. The conclusion is reached that the elasticity of GDP with respect to the value of M&As is negative in countries such as Chile, Peru and Mexico. A larger value of M&As tend to redistribute income towards profits and impart a negative impact on output. The impact for other Latin American economies in our sample is either slightly positive or uncertain.</p
... More recently, Ormosi, Mariuzzo, and Richard (2015) and Kwoka (2013Kwoka ( , 2015 conducted ex post evaluations of M&A in the European Union and the United States, respectively. For the European Union, the authors note that average prices had increased by 3.7%, with 14 observations showing an increase in average price of 8.2% and 7 observations showing a decrease in average price of 4.2%. ...
The evolution of mergers and acquisitions (M&A) in Latin America from 1990 to 2014 is analyzed herein. A one‐sector production model without government and external sectors that links prices/costs, income distribution, demand and output is proposed, and the effects of changes in M&A on profit margins, income distribution and gross domestic product (GDP) are evaluated. The model is applied to most regional economies to determine the impact of these transactions on the profit share and level of economic activity. Our analysis does not reject the hypotheses that M&A have distributive effects favorable to profits and that they have contractionary effects on GDP in Latin American countries.
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