European Business Schools Librarian's Group
IESE Research Papers,
IESE Business School
No D/1056: Ex-Post Merger Review and Divestitures
André Romahn () and Richard Friberg ()
Additional contact information
André Romahn: IESE Business School, Postal: IESE Business School. Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Richard Friberg: Stockholm School of Economics, Postal: Stockholm School of Economics, P.O Box 6501, SE-113 83 Stockholm
Abstract: Divestitures have received little attention in ex-post evaluations of mergers. In partial remedy we simulate the effects of the Carlsberg-Pripps merger in the Swedish beer market and compare the predicted outcomes with those observed ex-post. There are no important price increases following the merger and prices of divested beers fell. Our merger simulations, that are based on a random coefficients logit model, capture these pricing patterns and suggest that the divestitures were important in limiting price increases. Knowledge of the retailer's markup rules allows us to discard retailer behavior as an explanation for the pricing patterns.
Keywords: Merger simulation; ex-post merger review; divestitures; demand for beer
42 pages, December 18, 2012
Full text files
WP-1056-E.pdf
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