Takeover waves
Ano de publicación: 1999
Número: 30
Tipo: Documento de traballo
Resumo
Horizontal takeovers often occur in waves. A sequence of takeovers is obtained in a Cournot setting with cost asymmetries. They are motivated by two different reasons: (i) A low realization of demand increases the profitability of takeovers. (ii) Takeovers raise the profitability of future takeovers. A possible explanantion of merger races is also obtained by showing that firms buying in the first place pay a lower price for their targets.