Threatening to buy: Private equity buyouts and antitrust policy

Pehr Johan Norbäck, Lars Persson*, Joacim Tåg

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

3 Citations (Scopus)

Abstract

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.

Original languageEnglish
Peer-reviewed scientific journalEconomics Letters
Volume164
Pages (from-to)31-34
Number of pages4
ISSN0165-1765
DOIs
Publication statusPublished - 03.2018
Externally publishedYes
MoE publication typeA1 Journal article - refereed

Keywords

  • Antitrust policy
  • M&As
  • Private equity
  • Temporary ownership

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