the use of economic tools in merger analysis ......7 see generally, inter alia, m ivaldi and f...

August 2011 European Competition Journal 323

The Use of Economic Tools in Merger Analysis

THE USE OF ECONOMIC TOOLS IN MERGER ANALYSIS: LESSONS FROM US AND EU EXPERIENCE

PANAGIOTIS N FOTIS AND MICHAEL L POLEMIS*

A. IntroductIon

The importance of economic analysis in the application of competition rules, especially in mergers, has increased over the last few years. Econometric tech-niques may help competition agencies to assess merger cases quickly and guide them towards better decision making when faced with the increasing complexity of markets. Agencies employ a lot of techniques, from very basic to sophisti-cated ones. Today it is widely accepted that the use of economics has improved the decisions of competition authorities when it is appropriate.

This interest in economic evidence reflects the increasing use of economics and economic analysis in merger control as evidenced first in the US with the Merger Guidelines of 1984 and 1992. In the US the use of economic analysis is evident in the calculation of the significant lessening of competition (SLC) test. Under this test, a merger may have anticompetitive effects if it is likely to substantially lessen competition in the market. Under the aforementioned test, the investigation and assessment of a merger are more concerned with whether prices are likely to rise after the merger is consummated.

In the EU, mergers are regulated by the Merger Regulation 139/2004, which came into force in January 2004. The law requires that firms proposing to merge apply for prior approval from the European Commission (EC); specif-ically, mergers that transcend national borders, and where the annual turnover of the combined business exceeds a worldwide turnover of over e5000 million and a Community-wide turnover of over e250 million, must notify and be examined by the EC. The Merger Regulation thus involves predicting poten-tial market conditions which would pertain after the merger. The standard set by the law is whether a combination would significantly impede effective

* Panagiotis N Fotis is from the General Directorate of Competition, Hellenic Competition Com-mission and the University of Central Greece; e-mail: [email protected]. Michael L Polemis is from the General Directorate of Competition, Hellenic Competition Commission and the Uni-versity of Piraeus. The views expressed in this paper are solely those of the authors and do not reflect by any means the General Directorate of Competition and Hellenic Competition Commission or any individual Commissioner. An earlier version of this paper was presented at the OECD Global Forum of Competition “Cross-border Merger Control: Challenges For Developing and Emerging Economies”, 17–18 February 2011.

324 The Use of Economic Tools in Merger Analysis ECj vOL. 7 NO 2

competition in particular as a result of the creation or strengthening of a domi-nant position.

In Greece, the Hellenic Competition Commission (HCC) conducts Phase I and Phase II mergers. If it is established that the notified concentration, although falling within the scope of application of Article 5(2) of Law 3959/11,1 does not raise serious doubts about restricting competition in the partial markets concerned, the HCC, by a decision issued within a month from the notifica-tion, will allow the concentration (Phase I decision).2 If it is established that the notified concentration falls into the scope of application of the present law and raises serious doubts about the concentration’s compatibility with the require-ments of the competition’s functioning in the partial markets concerned, the Chairman of the HCC, by a decision issued within a month from the notifi-cation, will initiate the procedure of a thorough investigation of the notified concentration and will inform without delay the participating undertakings with regard to his decision (Phase II decision).3

This paper aims to cast light on the role of economic analysis in merger case decisions. For this reason, we focus on the main quantitative techniques (merger simulation models and event studies) used in merger analysis in the US and EU jurisdictions. Moreover, we try to offer some suggestions to other competition agencies derived from the HCC’s experiences in assessing selected merger cases.

The remainder of the paper is organised as follows. Section B provides the major economic instruments in assessing merger cases and sections C and D introduce the evolution of mergers in the EU and the US. Section D also highlights the Greek experience in evaluating merger cases and provides the basic characteristics of selected merger decisions of the HCC. Section E con-cludes.

B. EconomIc tools In EvAluAtIng A mErgEr cAsE

Merger control by conducting economic analysis broadly falls into two main categories: ex-post and ex-ante merger analysis (Fig 1). In ex-ante analysis, economic researchers try to evaluate possible anticompetitive effects of a proposed merger prudentially either by creating or strengthening a dominant position—mostly in European jurisdictions—in a relevant market or by assessing the significant lessening of competition by unilateral or coordinated effects (mostly in US jurisdiction). On the other hand, the ex-post assessment of merger decisions usually has two fundamental aims: (i) to establish whether the

1 Greek Competition Act, Law No 3959/11, ‘Protection of Free Competition’.2 Ibid, Art 8(3).3 Ibid, Art 8(4).


market structure arising from the decision is apt to pursue the economic goal of the Merger Control Regulation better than the market structures that could have arisen from alternative decisions within the set of decisions that the inde-pendent competition authority can legally take; and (ii) to assess whether the analysis adopted to reach the decision by the competition authority was correct (absence of Type I or II errors).4 It is worth mentioning that all the empirical and econometric techniques that can be employed for the ex-ante analysis of the effects of a merger are also applicable in the ex-post evaluation. However, the crucial difference between the two aforementioned categories lies in the amount of information available.5

The quantitative analysis of proposed mergers provides crucial information about structural demand characteristics (ie substitutability or complementarily of products, elasticity of demand, etc). By assessing whether the products of the merging firms are close demand substitutes can be critical to the applica-tion of the localised competition theory of unilateral competitive effects of mergers among sellers of differentiated products. Accordingly, econo metric estimates of demand elasticities are typically much more informative than descriptive economic facts (ie market shares, barriers to entry, cost structure, etc) in helping make inferences about whether such mergers will likely enhance

4 http://ec.europa.eu/competition/mergers/studies_reports/lear.pdf (accessed on 20 September 2010). See generally a recent econometric analysis presented at the Fifth Annual Competition and Regulation European Summer School and Conference, Crete, Greece, 2–4 July 2010, avail-able at http://10.130.100.5/files/65_Fotis%20-%20Polemis.pdf (accessed on 20 October 2010).

5 http://ec.europa.eu/competition/mergers/studies_reports/lear.pdf, ibid, 10–11.

Fig 1 Classification of Economic Models in Merger Analysis


the significant market power. However, in modern econometric techniques a large set of assumptions have to be made, in order to estimate the appropriate model. Hence, it is important to perform serious robustness evaluation, since these models can be quite sensitive to changes in the main assumptions.6 Lastly, it is worth mentioning that these models are usually data demanding.

1. Merger Simulation Models (MSMs)

MSMs may predict price increases or decreases from a merger, depending on the availability of inputs used to calibrate the model and the assumptions regarding the specification of the relevant econometric technique (ie AIDS, log-linear model, multi-level demand analysis, etc).7

MSMs are based on the theory of industrial organisation and are used so as to predict the effect of a proposed merger on prices and quantities of the merged firm and its competitors. By performing an economic analysis, a researcher can assess whether a merger may lead to a substantive lessening of the degree of competition in one or more relevant markets. In order to predict the post-merger price evolution, simulation models are based on market data (eg prices, quantities, cost evolution) extracted before the notified merger in tandem with the assumptions made for the undertaking firms and their rivals. MSMs have been employed both by antitrust authorities and merging com-panies and by courts to assess the pro- or anticompetitive effect of proposed mergers.8

Why is this kind of analysis appealing to competition agencies all over the world? The answer is straightforward. Firstly, during the last decade economic analysis combined with sophisticated econometric techniques has allowed researchers to apply even more complex simulation models based on real market data. Secondly, this technique is quite flexible and is able to integrate the traditional merger guidelines that focus on factors such as market definition, efficiencies and potential competition. Thirdly, merger simulation models can evaluate the impact of a divestiture, which constitutes a significant structural remedy. Moreover, simulation models allow researchers to consider the simplest counterfactuals.9

6 Ibid, 8. 7 See generally, inter alia, M Ivaldi and F Verboven, “Quantifying the Effects from Horizontal

Mergers in European Competition Policy” (2005) 23 International Journal of Industrial Organization 669.

8 O Budzinski and I Ruhmer, “Merger Simulation in Competition Policy: A Survey” (2010) 6(2) Journal of Competition Law and Economics 278; J Baker and D Rubinfeld, “Empirical Methods in Antitrust Litigation: Review and Critique” (1999) 1 American Law and Economics Review 386 and the references therein.

9 A situation in which the merger is blocked or it is unconditionally cleared; see http://ec.europa.eu/competition/mergers/studies_reports/lear.pdf, supra n 4, 8.


MSMs for diversified products involve a four-stage dynamic process (Fig 2). In the first stage, a consumer demand function can be estimated through econo-metric methods applied to data on actual transactions. The usual econometric models are the Almost Ideal Demand System (AIDS), the linear model, the log-linear model, probability models such as logit and probit, and the multi-level demand estimation. Depending on the specifications of the demand equation, own- and cross-price elasticities are estimated. According to the theory, large shares for the merging firms or relatively large cross-price elasticities between them tend to result in large (unilateral) price effects. On the other hand, small shares, small cross-price elasticities and/or large efficiencies tend to produce small or even negative (unilateral) price effects.10

In the second stage, the calibration of the model is needed (ie price selec-tion for the model parameters) in order to check whether the results are in alignment with the statistical data of the relevant market being scrutinised. The calibrated parameters are set in a way that the estimated elasticities can pro-duce the prices and the market shares before the proposed merger. In order to ensure the validity of the model, the estimated own-price demand elasticities must have a negative sign, while the cross-price elasticities can be either posi-tive (substitutes) or negative (less substitutes or complements).

10 O Ashenfelter, D Hosken and M Weinberg, “Generating Evidence to Guide Merger Enforce-ment”, CEPS Working Paper 183 (2009), 15.

Fig 2 Merger Simulation Process


In the third stage, MSMs allow the economists to describe the supply side by applying an oligopoly model which best describes the rivals’ competition. In the majority of cases the oligopoly model which is used is the Bertrand. The classic Bertrand model assumes that firms compete purely on price. Each firm decides independently and simultaneously what price to charge for their prod-uct. Both firms stand ready to deliver any quantity of the product. Therefore, even with only two firms, the Bertrand Oligopoly tends to be the competitive equilibrium price, unlike in the Cournot Oligopoly, where there is a gradu-ally lowered price for any increase in output, and firms get extra-competitive profits. The Bertrand model can be extended to include product or location differentiation, but then the main result—that price is driven down to marginal cost—no longer holds.

More specifically, in a Bertrand price competition with differentiated prod-ucts, the market demand prior to the merger is given as

q f p S

qp

qp

qSi i

i

i

i

j i

i= ( ) ∂∂

<∂∂

≥∂∂

<≠

, , , , 0 0 0

where i ≠ j are brand names, qi is the residual demand of brands i, pi is the price of brands i and S is the total sales of brand sector. Assuming constant marginal costs, profit function of brands i is Pi = (pi – ci)qi. The reaction function of profit maximised brands with respect to their price is si + simieii = 0, where si is the market share of brands i, mi is the price—cost margin of brands i and eii is the demand elasticity with respect to their price. The Bertrand–Nash equilib-rium of each brand is calculated by solving their reaction functions.

If brands i = 1, 2 merge and the rest (i = 3, …, n) remain independent brands in the sector, the merged brands maximise the joined profits, taking into account their strategic variable (price). The reaction functions of bands i = 1, 2 are s1 + s1m1e11 + s2m2e21 = 0 and s1 + s2m2e22 + s1m1e12 = 0, where all vari-ables reflect values after the completion of the merger. The variables e21 and e12 are cross-price demand elasticities with respect of the price. The reaction functions of the rest of the brands in the sector are the same with those prior to the merger.11

Finally, in the fourth stage, a researcher simulates the new (post-merger) equilibrium by applying the calibrated model with the pre-merger empirical data and calculating the market shares after the merger.

This methodology has high data requirements. Clearly the amount of data needed depends on the complexity of the economic model adopted, but equally

11 See generally M Ivaldi and G McCullough, “Welfare Tradeoffs in US Rail Mergers”, IDEI Working Paper 344 (2000), 1 and the references therein.


the availability and quality of the data determines which model can be used.12 The usual data that are needed in order to perform a MSMs include (i) prices and quantities, (ii) input factor prices, (iii) demand and consumers character-istics (eg income, education, age, sex, employment) and (iv) data on the main observable product characteristics (brand recognition, customer loyalty, etc).

2. Event Study Methodology (ESM)

Event study methodology (ESM) is among the most successful instruments of econometrics in policy analysis. By providing a methodology for measuring the impact of events on investor wealth, the analysis offers a fruitful way for evaluating the welfare implications of private and public actions.13 This meth-odology consists in assessing the stock markets’ reactions to an event (ie merger announcement, Phase II decision or derogation from suspension of concen-tration), so as to derive from these a view on the effect of the latter on the relevant markets. ESM relies on the assumptions that financial markets are effi-cient and that the agent’s expectations are rational.14

Following Davis and Garces,15 ESM uses the market model, which forecasts that a firm’s stock return at time t (Rt) is proportional to the market return. That is, Rt = a + bRmt + et, where Rmt is the return on the market index for the day t. Given estimates of a and b, the residual measures abnormal returns, that is,

AR R a Rt t t t= − + +( )β εµ 16

One branch of ESM investigates the effect of the announcement of mergers and suspension of derogation from concentrations on shareholder value both in the target firm and in the bidder. The main result of those studies is that the announcement of the event increases the value of the acquired firm and decreases (or at least do not affect) the value of the acquiring firm, respectively. Thus, the shareholders of target firms earn positive gains, while the sharehold-ers of bidding firms do not gain from the announcement of the event.17

12 http://ec.europa.eu/competition/mergers/studies_reports/lear.pdf, supra n 4, 12; http://www.internationalcompetitionnetwork.org/uploads/library/doc322.pdf (accessed on 15 October 2010).

13 F Wenston S Kwang and S Juan, Takeovers, Restructuring, and Corporate Governance (Prentice Hall, 1998), 93–106.

14 http://ec.europa.eu/competition/mergers/studies_reports/lear.pdf, supra n 4, 12. 15 P Davis and F Garces, Quantitative Techniques for Competition and Antitrust Analysis (Princeton Uni-

versity Press, 2010), 112. 16 I Kokkoris, “A Practical Application of Event Studies in Merger Assessment: Successes and

Failures” (2007) 3 European Competition Journal 70.17 P Fotis, M Polemis and N Zevgolis, “Robust Event Studies for Derogation from Suspension of

Concentrations in Greece During the Period 1995–2008” (2011) 11(1) Journal of Industry Compe-tition and Trade 67. See generally P Fotis, M Polemis and N Zevgolis, “Stock Price Performance


Even though ESM is well developed, there is some concern regarding the effectiveness of the methodology for small stock exchanges with thinly traded stocks (infrequent trading).18 The infrequent trading phenomenon appears when some stocks do not trade daily in the stock exchange. In such a case, the estimated variance and covariance of the stock performance will be positively correlated with their trade frequency.

In the literature, alternative methodologies have been proposed to deal with the infrequent trading phenomenon. The most frequently used method is the lumped returns method, which calculates daily returns from the stock price series and produces zero returns for non trading days. Other methods are the simple returns method, which calculates daily returns only for days for which stock prices are available,19 the uniform returns method, which calculates the daily returns between trading days and allocates the average daily return to each day for which trade does not occur, and the trade-to-trade approach, which uses all of the available information about total stock and market returns over time and no bias is introduced by attempting to estimate unobserved daily stock returns as occurs with the lumped or uniform techniques. However, this conclusion regarding the use of the trade-to-trade approach holds only in the case where the stock of the firm under scrutiny is actually traded. For example, consider the trade-to-trade return of the stock to be calculated as

R

LP Pt

tt t Lt

= − −1

ln ln

where Lt is the length of time between the trade in period t and the previous successive trade, Pt is the stock’s traded price in period t and Pt–Lt is the price of the stock Lt in t periods in the past. If the stock is traded without having an impact on the stock price (zero returns), the returns are likely to lead to positive serial correlation in the return series. Therefore, the trade-to-trade approach will only reduce, but not eliminate, the bias on empirical findings towards the rejection of serial independence.

Another branch of ESM analyses the competitive effects of merger announce-ment. By analysing the share price of both merging and non-merging firms around the announcement of the event, the analyst may make inferences about

as an Argument for Derogation from Suspension of Concentrations: Reality or Myth?” (2009) 5 European Competition Law Review 2192.

18 E Dimson, “Risk Measurement when Shares are Subject to Infrequent Trading” (1979) 7(2) Journal of Financial Economics 205; E Maynes and J Rumsey, “Conducting Event Studies with Thinly Traded Stocks” (1993) 17(1) Journal of Banking & Finance 147.

19 http://10.130.100.5/files/65_Fotis%20-%20Polemis.pdf, supra n 4, 5. See generally J Barthodly, D Olson and P Peare, “Conducting Event Studies on a Small Stock Exchange” (2007) 13(3) European Journal of Finance 227; R Heinkel and A Kraus, “Measuring Event Impacts in Thinly Traded Stocks” (1998) 23(1) Journal of Financial and Quantitative Analysis 71.


the competitive effects of the merger in the relative product market wherein the merger occurs.20 Lastly, ESM may also be used to analyse the effect of antitrust enforcement agencies on the stock value of merging parties.21

In sum, the data required to apply this methodology are quite limited and easy to acquire. However, since the necessary data are the stock prices of the firms affected by the merger around the key event dates, if (at least some of) the key firms are not quoted on the stock market, the data will not exist and the event study cannot be run.22

c. thE EvolutIon of mErgErs In thE us

The Clayton Act is the primary US statute governing the substantive competi-tion issues raised by mergers and acquisitions. It prohibits acquisitions where “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly”.23 Joint ventures typically are also evaluated under the Clayton Act, although they may also be judged under the Sherman Act, which prohibits unreasonable restraints of trade, attempts to monopolise and monopolisation.

The Hart-Scott-Rodino (HSR) Act established the federal Premerger Noti-fication Program, which provides the Federal Trade Commission (FTC) and the Department of Justice (DOJ) with information about large mergers and acquisitions before they occur.24 Under the Program, the parties to certain pro-posed transactions must submit premerger notification to both the FTC and DOJ. This involves completing an HSR Form (also called a “Notification and Report Form for Certain Mergers and Acquisitions”), to provide details about each company’s business. The parties may not close their deal until the wait-ing period outlined in the HSR Act has passed or the government has granted early termination of the waiting period.25

20 M Beverley, “Stock Market Event Studies and Competition Ccommission Inquiries”, Centre for Competition Policy (CCP) Working Paper 08-16, 6; http://skylla.wz-berlin.de/pdf/2002/iv02-34.pdf (accessed on 17 October 2010).

21 G Langus and M Motta, “The Effect of EU Antitrust Investigations and Fines on a Firm’s Valuation” Centre for Economic Policy Research, Discussion Paper 6176 (2007).

22 http://ec.europa.eu/competition/mergers/studies_reports/lear.pdf, supra n 14, 14. 23 See Section 7, 15 USC, §18 (2000); acquisition by one corporation of stock of another. 24 The Hart-Scott-Rodino Antitrust Improvements Act is the statute governing the procedural

aspects of the government’s review of mergers and acquisitions. It gives the two federal agen-cies which review the competitive implications of transactions, the Antitrust Division of the DOJ and the FTC, the opportunity to assess the antitrust issues posed by proposed transac-tions before those transactions are consummated. While the Antitrust Division and the FTC have parallel jurisdiction to review transactions, the agencies have developed a procedure which allocates or “clears” transactions to one agency or the other.

25 Further information is available at http://www.ftc.gov/bc/hsr/index.shtm.


Table I illustrates the evolution on the number of merger notifications in the US. It is evident that the total merger enforcement actions have shown a downward trend within the period 1996–2010 (from 25 in 1996 to 22 in 2010). It is worth mentioning that the number of decisions that are cleared by the FTC with commitments has shown a slightly decline (18 decisions in 2010 compared to 20 in 1996). More specifically, in the Airgas/Air Products and Chemi-cals case, the industrial gas supplier Air Products and Chemicals, Inc. reached an agreement with the FTC requiring the company to sell certain liquid gas assets to resolve the FTC’s charges that Air Products’ proposed acquisition of Airgas would harm competition in five regional markets for bulk liquid oxygen and bulk liquid nitrogen, which are used in a range of applications from hospi-tal patient care to the manufacture of frozen foods. In another important case (Tops/Penn Traffic), the FTC reached a settlement agreement with Tops Markets LLC that protects consumers from the potential anticompetitive effects of Tops’ recent acquisition of the bankrupt Penn Traffic Company supermarket chain. To settle the FTC charges that the acquisition was anticompetitive in several areas of New York and Pennsylvania, Tops agreed to sell seven Penn Traffic supermarkets to FTC-approved buyers. Because the FTC adopted a flexible process for reviewing the potential anticompetitive effects of the acquisition, none of the 79 Penn Traffic stores was liquidated in the bankruptcy proceeding.

Table I: Merger Enforcement Actions in the US, 1996–2010, as of 31 October 2010

Fiscal year Consents

Federal injunctions

Admin-istrative complaints

Abandoned/fix–it–first/restructured

Total merger enforcement actions Civil penalty actions

Section 7 A

Order violations

1996 20 3 2 25 4 –1997 17 2 1 5 25 2 21998 22 3 1 6 32 1 31999 19 – – 12 31 2 –2000 18 5 – 9 32 – –2001 18 1 – 4 23 – 12002 10 5 2 7 24 1 –2003 7 3 1 10 21 – –2004 10 1 1 3 15 1 12005 9 1 – 4 14 1 –2006 9 – – 7 16 – –2007 14 3 5 22 1 –2008 13 1 1 6 21 1 –2009 9 6 1 3 19 2 22010 18 – 1 3 22 – –Total 213 34 9 86 342 16 9

Source: Federal Trade Commission.


Lastly, in Fidelity/LandAmerica case, the FTC decided that Fidelity’s acquisition of the LandAmerica assets was anticompetitive in several local markets for the provision of title insurance information services by title plants. The FTC’s complaint charges the acquisition with reducing competition in six geographic areas. In order to alleviate the Commission’s concerns, Fidelity National Finan-cial, Inc will sell several title plants and related assets in the Portland, Oregon and Detroit, Michigan metropolitan areas, and in four other Oregon counties.

The number of mergers that have been abandoned by the parties after the intervention of the Commission or prohibition by the FTC has increased throughout the scrutinised period (from three in 1996 to six in 2009). More specifically, in the Thoratec Corporation/HeartWare International, Inc case, the FTC authorised a lawsuit to block Thoratec Corporation’s proposed $282 mil-lion acquisition of rival medical device maker HeartWare International, Inc, charging that the transaction would substantially reduce competition in the US market for left ventricular devices (LVADs), a life-sustaining treatment for patients with advanced heart failure. Thoratec currently has a monopoly on the commercial sale of LVADs in the US, and the FTC’s administrative complaint alleges that Thoratec seeks to maintain its monopoly by acquiring HeartWare, thus eliminating the only significant threat to Thoratec’s continued dominance of the LVAD market. The Commission concurrently authorised staff to file a complaint in a federal district court seeking a preliminary injunction to prevent the parties from consummating the transaction pending a full administrative trial on the merits. In August of 2009, since the parties announced that they would not proceed with the proposed acquisition, the Commission dismissed the administrative complaint. In another important case, Ovation Pharmaceuti-cals, Inc,Ovation Pharmaceuticals, the manufacturer of Indocin, a drug used in the treatment of patent ductus arteriosus (a congenital heart defect usu-ally found in severely underweight premature babies), purchased the rights to the drug NeoProfen, a drug about to receive Food and Drug Administra-tion (FDA) approval for the treatment of the same condition, which effects approximately 30,000 babies per year in the US. Shortly after the acquisition, which fell below the premerger notification threshold and thus avoided antitrust review, Ovation raised the price of its Indocin treatment from $36 per vial to $500 per vial, exercising its monopoly power, and forcing desperate consumers to pay artificially inflated prices to treat this potentially fatal condition. After its FDA approval, Ovation released its NeoProfen treatment, charging similar prices. According to the FTC’s complaint, Ovation’s acquisition was intended to maintain its monopoly in the market for this treatment. The Commission is therefore seeking divestiture of assets related to one of the two treatments, and also disgorgement of all unlawfully obtained profits from the sale of these two treatments.


Finally, it is worth mentioning that the number of civil penalty actions from FTC has been increasing over recent years, reaching a total number of 25 decisions. More specifically, the FTC ordered violations in nine cases through-out the reference period (1996–2010) and imposed fines on 16 cases under the auspices of section 7a of the Hart-Scott-Rodino Act. In a recent case (Bristol-Myers Squibb), drug maker Bristol-Myers Squibb Company (BMS) agreed to pay $2.1 million—the largest fine allowed by law—for failing to inform the FTC of agreements reached with Apotex, Inc regarding potential generic competition to its blockbuster drug Plavix. BMS’s conduct violated a 2003 FTC Order and the Medicare Modernization Act, which requires that certain drug company agree-ments be accurately reported to both the Commission and the US Department of Justice. The complaint alleges that BMS failed to disclose that, as part of a patent settlement in which Apotex agreed not to launch its generic version of Plavix for several years, BMS also orally stated that it would not compete with Apotex during the first 180 days after Apotex did market its new generic drug. Finally, in another case (Aspen Technology, Inc), the FTC modified a 2004 order against Aspen Technology, Inc to restore competition in the US markets for several engineering process simulation software products. The Commission’s action came after Aspen Tech failed to divest certain assets in a timely manner, as required by the 2004 FTC order. The Commission had determined to bring an enforcement action against Aspen Tech based on the order violations. How-ever, Aspen Tech agreed to settle the order violation charges by complying with additional obligations imposed by the modified order.

d. thE Ec ExpErIEncE of mErgErs

In the EU, mergers which create or strengthen a dominant position will be prohibited. According to Article 2(3), “A concentration which creates or strengthens a dominant position as a result of which effective competition would be significantly impeded in the common market or in a substantial part of it shall be declared incompatible with the common market”. The EC, before Merger Regulation 139/2004, used the so-called dominance test (DT). Under the DT, mergers were likely to be blocked if they led to a single firm being dominant in the market (single firm dominance) or a number of firms colluding (collective or joint dominance). The notion of dominance certainly reaches situations in which a market leader with a degree of independence from competitive pressures is created.26 Many national competition authorities rely on one of two main tests applied to assess whether a merger has anti-

26 OECD, “The Standard for Merger Review, with a Particular Emphasis on Country Experi-ence with the Change of Merger Review Standard from the Dominance Test to the SLC/SIEC Test” (2009) 21 Competition Law & Policy 8.


competitive effects: (i) the DT and (ii) the SLC test. Some other jurisdictions (eg European Commission) have a hybrid test, which combines the DT and the SLC standards. However, in the last amendment of Merger Regulation 139/2004,

“The notion of ‘significant impediment to effective competition’ in Article 2(2) and (3) should be interpreted as extending, beyond the concept of dominance, only to the anticompetitive effects of a concentration resulting from the non-coordinated behaviour of undertakings which would not have a dominant position on the market concerned.”27

Indeed, the European Commission published its revised text for the EC merger regulation, and an associated set of enforcement guidelines on the analysis of horizontal mergers. In particular, the merger guidelines acknowledge that the assessment of mergers needs to go beyond the definition of the relevant market and the calculation of market shares and explicitly to allow for the consideration of buyer power, efficiencies created by the mergers and possible failing firm defence doctrine. More importantly, many of the merger guidelines focus on the nature of the economic analysis needed to identify the competi-tive constraints that each of the merging parties currently poses upon the other (significant lessening of competition).28

Fig 3 illustrates the evolution of the number of merger notifications in the EC. It is evident that the number of notifications has shown an upward trend within the last 20 years, rising from 64 notifications in 1991, which was the first full year of implementation of the Merger Regulation, to 218 notifications in 2010. Phase I decisions follow a similar trend, while it is worth mentioning that the number of the compatible decisions has shown a decrease within the period 2006–10 of 48.8% (from 211 in 2006 to 108 in 2010). Lastly, the number of decisions that are cleared by the EC with commitments has shown a steady increase, reaching the 13 decisions in 2010 compared to just three in 1991.

Fig 4 depicts the evolution on the number of Phase II decisions in the EC. More specifically, the Phase II decisions that have been cleared by the EC with commitments (ie by imposing structural or behavioural remedies) repre-sent 57% of the total decisions, reaching 91 decisions during the last 20 years (1990–2010). The decisions compatible with the Merger Regulation account for 29% (47 out of 162), whereas the EC has prohibited 20 notified mergers (or 12% of the total decisions) within the same time span (1990–2010).

Lastly, according to Article 7, paragraph 3 of Merger Regulation 139/2004, the Commission may, on request, grant derogation from the obligations imposed in paragraphs 1 and 2. The request to grant derogation must be reasoned. It

27 Merger Regulation 139/2004, thought 25. 28 See M Motta, Competition Policy: Theory and Practice (Cambridge University Press, 2004); OECD,

supra n 26, 58.


Fig 3 Notified Mergers and Phase I Decisions in the EU, 1990–2010,as of 31 October 2010

Source: European Commission—DG COMP (http://ec.europa.eu/competition/merg ers/statistics.pdf)

Fig 4 Phase II decisions in the EU, 1990–2010, as of 31 October 2010Source: European Commission—DG COMP (http://ec.europa.eu/competition/merg ers/statistics.pdf)


should be noted that from 21 September 1990 to 20 September 2008 the EC has issued 100 decisions about derogation from suspension of concentrations.29

1. The Greek Experience in Evaluating Mergers

The Hellenic Competition Commission (HCC) conducts both Phase I and Phase II merger procedures. More specifically, the HCC examines the notified merger as soon as the relevant notification is submitted. If it is established that the notified concentration does not fall into the scope of application of Article 5(2) of Law 3959/11, within 1 month from the notification, the chairman of the HCC issues an act that is notified to the natural persons or the under-takings that have proceeded to the notification. This act does not restrict the application of the provisions of Articles 1 and 2 of the present law. If it is established that the notified concentration, despite falling into the scope of application of Article 5(2), does not raise serious doubts to restrict competi-tion in the partial markets concerned, the HCC, by a decision issued within 1 month from the notification, allows the concentration (Phase I or Article 8(3) decision). However, if it is established that the notified concentration falls into the scope of application of the present law and raises serious doubts about the concentration’s compatibility with the requirements of the competition’s functioning in the partial markets concerned, the chairman of the HCC, by a decision issued within 1 month from the notification, initiates the procedure of thorough investigation of the notified concentration and informs without delay the participating undertakings with regard to his decision (Phase II or Article 8(4) decision).30

Tables 1–3 in the appendix present the evolution of the premerger decisions (including Phase II and Phase I decisions) of the HCC from 1995 to the begin-ning of 2011.31 It is clear from the analysed merger cases that the majority of premerger decisions constitute horizontal32 concentrations, whereas only 42 out of 335 decisions (12.54%) constitute conglomerate33 merger cases.

Table 1 in the appendix shows that mergers and acquisitions (M&A) in the food and chemical markets are the national championsof the manufacturing sector. In the food market, the HCC has cleared 33 horizontal cases but only two conglomerate mergers; in the chemical market, the HCC has cleared 23 horizontal merger cases but only two conglomerate concentrations.

29 See Fotis et al, supra n 17. 30 Phase II or Art 8(4) decision came into force in the Greek Competition Law at the end of

2005.31 We use the standard Statistical Classification of Economic Activities in the European Community, avail-

able at http://ec.europa.eu/competition/mergers/cases/index/nace_all.html.32 The term horizontal here means that both firms in the concentration belong to the same sector

in which the merger takes place. 33 The term conglomerate here means that acquired and acquiring firms belong to different sectors.


Financial service activities, including the banking sector, is also one of the most active sectors in Greece. As Table 2 in the appendix indicates, the HCC has cleared 31 M&A when both firms in the concentration belong to the finan-cial sector and 14 concentrations when only the acquiring firm belongs to the financial sector. In particular, the banking sector in Greece “constitutes an oli-gopolistic market with few large players as a consequence of the mergers and acquisitions that took place during the period 1996–2001”.34 During the period from 1995 to 2011 the HCC cleared 24 mergers, of which 71% constitute horizontal and 29% conglomerate concentrations.35 The main characteristic of those mergers

“is that there are no transactions among the five largest commercial banks in Greece in terms of total assets. In the banking sector always the big fish eats the small fish36 so as the big fish to be bigger and the small fish to disappear from the market”.37

Additionally, the concentration rate in terms of the Herfindahl and CR5 indexes in the banking sector has remained stable from 2001. According to the former index, the concentration rate ranged from 1.113 in 2001 to 1.172 in 2008. Concerning the latter index, the rate ranged from 67 to 69.5% over the same period. However, the picture is not the same when the total assets index (in millions of euros) is used as an indicator of the degree of concentration. In particular, during the period from 2001 to 2008, the total assets index increased from 202,736 in 2001 to 461,982 million euros in 2008.38

The evolution of Phase II premerger decisions by HCC (Table II) illustrates that during the period from 2006 to the beginning of 2011 the HCC cleared 15 Phase II merger cases (16.93% of the total Phase I and II decisions of that period). The manufacturing (food, chemicals, coke and refined petroleum products) and construction sectors constitute the markets with the majority of Phase II decisions.

2. Selected Merger Cases of the Hellenic Competition Commission

The use of quantitative techniques depends on the difficulty of the notified concentration and the potential effects on competition. Therefore, the use of econometrics increases as the restriction of effective competition in the relative product market in which the merger takes place becomes a serious issue.

34 See OECD, “Competition, Concentration and Stability in the Banking Sector” [2010] Compe-tition Law & Regulation 128, available at http://www.oecd.org/dataoecd/52/46/46040053.pdf (accessed on 30 January 2011).

35 Ibid, figure 2, 129.36 See S Huck, “Big Fish Eat Small Fish: On Mergers in Stackelberg Markets” (2001) 73(2) Eco-

nomics Letters 214.37 OECD, supra n 33, 126.38 Ibid, table 3, 127.


(a) Acquisition of British Petroleum Hellas SA by Hellenic Petroleum SA

On 10 July 2009, Hellenic Petroleum SA (ELPE) notified the HCC of its proposed share purchase of British Petroleum Hellas SA Oil Trading (BP). Upon completion of the conditions envisaged in the share purchase agreement, Hellenic Petroleum would acquire direct and sole control of BP.

On 5 August 2009, the HCC initiated Phase II proceedings on the basis that the concentration raised serious doubts as to its compatibility with effec-tive competition in certain affected markets. In particular, the investigation focused on the retail markets for petrol and diesel in certain prefectures of Greece, where the new entity would obtain very high market shares (notably Greek islands exhibiting particular market characteristics), as well as on issues of access of third parties to the storage facilities of Hellenic Petroleum. The potential impact of the concentration in the wholesale trade markets for petrol and diesel was also examined.

Hellenic Petroleum, which is a vertically integrated company holding a 75% market share in refining, subsequently submitted commitments and in October 2009 the HCC approved the notified concentration, while attaching condi-tions corresponding to the parties’ commitments. In particular, as regards the above retail markets for petrol and diesel, Hellenic Petroleum should free from its network a number of service stations, equivalent to a reduction of market share to below 55% (based on volume sales). The process was to be completed within a period of a few months, prior to the upcoming summer season. Hel-lenic Petroleum wouldnot be able to reacquire the released service stations for a period of 6 years thereafter. Hellenic Petroleum further committed to grant access to third parties to its storage facilities/depots in Crete, under fair and non-discriminatory terms.

Table II: Inter- and Intraindustry M&A Matrix in Greece: Phase II Decisions of HCC, 2005–11, as of 31 January 2011

Nace code: Acquiring

Nace code: Acquired

C10a C19 C20 C24 F41 G47 J59

C10 5C19 2C20 3D35 1

F41 2G47 1J58 1


The event study analysis of the specific merger shows a statistically signifi-cant negative reaction of the abnormal return (AR) of the merged entity of 0.44% the day after the announcement of the merger. Also, the cumulative abnormal return (CAR) decreases by 0.22% during the merger announce-ment.39

A similar picture holds for the period of Phase II decision by the chairman of HCC. The AR decreases by 0.07% the day after the merger announcement and the CAR remains the same the day before and the day after the announce-ment of the decision.40

If we expand the event period to a larger time span (to –5/+5, –10/+10, –15/+15 and –20/+20 days) around the announcement day of the merger, the outcome is the same. More specifically, the relevant sign of the CAAR and CAR of both merged firms is on average negative, but not statistically significant.

(b) Joint Venture between PPC SA and Halivourgiki SA

On 16 February 2009, Public Power Corporation SA (PPC) and Halyvourgiki SA, notified the HCC of the formation of a joint venture to undertake the construction and operation of two power plants with a total capacity of 880 MW, within the facilities of Halyvourgiki. Halyvourgiki SA would own 51% of the share capital of the joint venture and PPC would own 49%. In this case, the HCC approved the notified concentration (29 May 2009), while attaching conditions intended to ensure the effective level of competition in the relevant market for electricity.

In this merger the HCC delineated four relevant distinct markets (ie gen-eration of electricity, supply of electricity from wholesalers or importers to final consumers, transmission of electricity through a high-voltage grid and distribution of electricity through a medium- or low-voltage grid). It is worth mentioning that, before the liberalisation of the electricity supply segment (February 2001), PPC was the only supplier of electricity, apart from a few other individual manufacturers that produced electricity only for self-consump-tion. By 2007, nine supplier companies, holding licences from the Ministry of Development, were selling electricity to PPC, imported via interconnectors or generated by independent power producers to the industrial and commercial customers (Fafaliou and Polemis, 2010).

HCC initiated Phase II proceedings on the basis that the concentration raised serious doubts as to its compatibility with effective competition in cer-tain affected markets. In particular, the investigation focused on the wholesale

39 One day prior and after the merger announcement; see http://10.130.100.5/files/65_Fotis%20-%20Polemis.pdf, supra n 4, 26.

40 Ibid, table 4, 12.


market for electricity, where the new entity would obtain very high market shares, as well as on issues of access of third parties, etc. By decision, the HCC approved the notified concentration, while attaching conditions intended to ensure that the undertakings concerned comply with the commitments they have entered into vis-à-vis the Commission. In particular, (i) PPC and its sub-sidiaries are not able to hold (directly or indirectly) stocks exceeding 49% of the share capital of the joint venture; (ii) the board of directors of the new company will consist of seven members, four being appointed by Xalyvour-giki SA and three by PPC; (iii) the chief executive officer will be appointed by the members of the board who represent Xalyvourgiki SA; and (iv) the joint venture is obliged to inform the HCC of any relevant amendment to its share capital.

The event study analysis of the specific merger shows a statistically signifi-cant positive reaction of the AR of the merged entity of 3.43% the day after the announcement of the merger. Also, the CAR increases by 6.50% during the merger announcement.

The reverse picture holds during the period of Phase II decision by the chairman of the HCC. The AR decreases by 2.26% the day after the merger announcement and the CAR decreases by 3.78% from 1 day prior and to 1 day after the announcement of the decision.

Expanding the event period to –5/+5, –10/+10, –15/+15 and –20/+20 days around the announcement day of the merger, the outcome is the same. More specifically, the relevant sign of the CAAR and CAR of both the merged firms is on average positive and statistically significant for 5 and 10 days prior to and after the announcement of the merger.

(c) Merger between Delta Holdings SA and Chipita International SA

On 17 April 2006, Delta Holdings SA (Delta) and Chipita International SA (Chipita) notified the HCC of a merger agreement. On 17 May 2006, the HCC initiated a Phase II investigation. Based on the evidence gathered during the course of the investigation, the HCC concluded that the notified transac-tion could not potentially impede effective competition through the creation or strengthening of a dominant position in certain relevant markets (10 July 2006).

The event analysis of the specific merger shows that the effects of the merger on competition are inconclusive. For short event periods around the merger announcement, the CAAR of all firms in the relevant market decreases by 0.67% the day after the merger announcement,41 but for larger time spans, ie until the clearness of the merger, the statistically significant positive stock reaction of the competitors indicates that the specific merger may have nega-tive effects in the relevant product market.

41 Ibid, 14, 17.


(d) Acquisition of MEVGAL by VIVARTIA

According to the statement of objections, the notified acquisition of MEVGAL’s dairy business by VIVARTIA may lead to a significant impediment to effective competition in the relevant markets for the procurement of raw milk (as the merger would bring together the two main purchasers of raw milk in Northern Greece), the production and distribution of fresh milk, and the production and distribution of chocolate milk. Structural remedies are thus necessary with a view to rendering the concentration compatible with merger control rules.

During the period from the notification to the issuing of the statement of objections of the proposed merger, the case team of the Directorate General of Competition focused on the analysis of the product market of fresh and raw milk (especially the vertical business relationship between the merged entity and the producers of raw milk in specific geographical markets in Greece).

The delineation of the relevant product market of fresh milk estimated the natural logarithms of the quantity variables on the natural logarithms of the price and demand-shifting variables (a log–log demand system). Specifically, under the log–log linear demand system, the demand equation for type i fresh milk is

q pi i j j

j

n

= + +=∑α β γlogΠ ,

1

where qi is the quantity of type i fresh milk, P is the fresh milk sector expend-iture, pj is the price of type j fresh milk and a, b and gij are the parameters to be estimated. The log–log linear demand system approximates any demand system at a given set of prices.42

The results show that the elasticities of different types of fresh milk are


The above-mentioned results coincide more or less with the results of other studies examining the elasticity of demand of fresh milk in other European countries. Following Bouamra-Mechemache et al,

“the demand for dairy products is rather inelastic as most of the studies report price elasticity lower than 1 (in absolute term). However, results vary significantly from one study to another and it is difficult to define the source of variation with any precision (methodology, period, type of data and type of elasticity that is computed). Certainly, there are also country differences”. 43

Soregaroli and Trévisiol,44 using log–log models for UK and German data, estimate that the own price elasticities of fluid milk in the UK and fresh diary products in Germany are 0.2 and 0.4 (in absolute terms), respectively.45 Lavergne et al 46 also use a log–log model to estimate demand elasticity for all diary products in France. Their estimates, which use data from 1970 to 1993, indicate that diary products in France are characterised by inelastic demand (0.21 in absolute terms). In contrast, a study from Xepapadeas and Habib47 shows that the demand for drinking milk in Greece is elastic and almost 1.18.

The parties of the notified transaction used academics to support the idea that the proposed merger will not restrict competition, especially in the rel-evant market of fresh milk. The parties’ economists performed econometric techniques (eg the AIDS model) in order to show that the notified transaction is free from any unilateral (static) effects.

E. concludIng rEmArks

During the last decade, the role and importance of economic/econometric analysis in merger control has been acknowledged as a fundamental policy tool, and has been adopted by government officials and competition authorities throughout the globe to promote economic development and enhance the level of competition in the markets. On the one hand, general improvement in the quantitative techniques in tandem with the availability of data have made the

43 Z Bouamra-Mechemache, V Réquillart, C Soregaroli and A Trévisiol, “Demand for Dairy Products in the EU”, 4, available at http://idei.fr/doc/wp/2007/eu_dairy_demand.pdf (accessed on 16 January 2011).

44 C Soregaroli and A Trévisiol, “Demand for Dairy Products Estimated Price Elasticities in Selected Countries”, available at http://edim.vitamib.com/HNB/edim/edim.nsf/All/91FF0418C4E03155C12570DE0036B4FC/$file/TR02-2005-demand%20elasticities.pdf (accessed on 17 January 2011).

45 Ibid, 9.46 P Lavergne, V Réquillart and M Simioni. “Welfare Losses Due to Market Power: Hicksian

versus Marshallian Measurement” (2001) 83(1) American Journal of Agricultural Economics 157.47 A Xepapadeas and H Habib. “An Almost Ideal Demand System with Autoregressive Distur-

bances for Dairy Products in Greece” (1995) 2(6) Applied Economics Letters 169. The authors use a C-exponential model and data from 1960 to 1991.


application of empirical methods for use in economic analysis feasible. On the other hand, sound economic analysis is useful for national competition authori-ties and judges in their decisions. This interest in economic evidence reflects the increasing use of economics and economic analysis in merger control, as first evidenced in the US by merger cases such as Airgas/Air Products and Chemi-cals and Fidelity/LandAmerica. In Europe, the evolution of the merger analysis is founded on the formulation of the Office of the Chief Economist in DG Comp (2002) and its increasing involvement in a number of important merger cases, such as Nestle/Perrier and Ryanair/AirLingus.

In this paper, we consider the main trends and characteristics involved in merger control analysis with emphasis on the progress made in the economic tools and quantitative techniques (merger simulation models and event studies) employed by the US and EU jurisdictions. Our theoretical approach to the issue shows that, over the last few years, merger control analysis has under-gone significant changes, and further progress has been made in terms of the application of more complex econometric techniques. Despite the fact that economic analysis can play many useful roles in merger analysis, it is impor-tant to have accurate data and correct techniques at hand. Therefore, national competition authorities should not rely on the data sets submitted by the parties unless their reliability is verified by other economic sources.


Tab

le 1

: In

teri

nd

ust

ry &

In

trai

nd

ust

ry M

&A

mat

rix

in G

reec

e: M

anu

fact

ure

+ (

1995

– 2

011)

, as

of

31 J

anu

ary

2011

Nac

e cod

e Acq

uire

d N

ace c

ode

Acqu

iring

C

10

C11

C

12

C13

C

14

C15

C

16

C17

C

18

C19

C

20

C21

C

22

C23

C

24

C25

C

26

C27

C

28

C29

C

30

C31

C

32

F43

J62

I55

C10

33

1

C11

5

C

12

2

C13

6

C

14

1

C15

C

16

1

C17

4

C

18

1

C19

11

C20

23

1

C21

8

C

22

1

3

1

C23

2

C

24

4

1

C25

1

4

C

26

1

1

C27

1 1

C

28

3

C29

1

C

30

1

C31

C

32

18

D

35

1

G45

1

G

47

1

F41

1

J61

1

+C

10 –

C32

: C

10 -

Man

ufac

ture

of

food

pro

duct

s, C

11 -

Man

ufac

ture

of

beve

rage

s, C

12 -

Man

ufac

ture

of

toba

cco

prod

ucts

, C

13 -

Man

ufac

ture

of

text

iles,

C14

- M

anuf

actu

re o

f w

eari

ng a

ppar

el,

C15

- M

anuf

actu

re o

f le

athe

r an

d re

late

d pr

oduc

ts, C

16 -

Man

ufac

ture

of

woo

d an

d of

pro

duct

s of

woo

d an

d co

rk, e

xcep

t fu

rnitu

re, C

17 -

Man

ufac

ture

of

pape

r an

d pa

per

prod

ucts

, C18

- P

rint

ing

and

repr

oduc

tion

of r

ecor

ded

med

ia, C

19 -

Man

ufac

ture

of

coke

and

re

fined

pet

role

um p

rodu

cts,

C20

- M

anuf

actu

re o

f ch

emic

als

and

chem

ical

pro

duct

s, C

21 -

Man

ufac

ture

of

basi

c ph

arm

aceu

tical

pro

duct

s an

d ph

arm

aceu

tical

, C22

- M

anuf

actu

re o

f ru

bber

and

pla

stic

pro

duct

s, C

23 -

Man

ufac

ture

of

othe

r no

n-m

etal

lic m

iner

al p

rodu

cts,

C24

- M

anuf

actu

re o

f ba

sic

met

als,

C25

- M

anuf

actu

re o

f fa

bric

ated

met

al p

rodu

cts,

exc

ept

mac

hine

ry a

nd e

quip

men

t, C

26 -

Man

ufac

ture

of

com

pute

r, e

lect

roni

c an

d op

tical

pro

duct

s, C

27 -

M

anuf

actu

re o

f el

ectr

ical

equ

ipm

ent,

C28

- M

anuf

actu

re o

f m

achi

nery

and

equ

ipm

ent

n.e.

c.,

C29

- M

anuf

actu

re o

f m

otor

veh

icle

s, t

raile

rs a

nd s

emi-t

raile

rs,

C30

- M

anuf

actu

re o

f ot

her

tran

spor

t eq

uipm

ent,

C31

- M

anuf

actu

re o

f fu

rnitu

re,C

32 -

Oth

er m

anuf

actu

ring

, D

35: E

lect

rici

ty, g

as, s

team

and

air

con

ditio

ning

sup

ply

F41

: Con

stru

ctio

n of

bui

ldin

gs,

F43

: Spe

cial

ised

con

stru

ctio

n ac

tiviti

es, G

45: W

hole

sale

and

ret

ail t

rade

and

rep

air

of m

otor

veh

icle

s an

d m

otor

cycl

es, G

47: R

etai

l tra

de, e

xcep

t of

mot

or v

ehic

les

and

mot

orcy

cles

, J6

1: T

elec

omm

unic

atio

ns,

J62:

Com

pute

r pr

ogra

mm

ing,

con

sulta

ncy

and

rela

ted

activ

ities

, I5

5: A

ccom

mod

atio

n.

Sou

rce:

Aut

hor’

s el

abor

atio

n.

AP

PE

ND

IX


Tab

le 2

: In

teri

nd

ust

ry &

In

trai

nd

ust

ry M

&A

mat

rix

in G

reec

e: C

omm

erce

- S

ervi

ces+

(19

95 –

201

1),

as o

f 31

Jan

uar

y 20

11

Nac

e cod

e Acq

uire

d N

ace c

ode

Acqu

iring

C

3 3 D

3 5 E

36

E38

E

39

F41

F

42

F43

G

45

G46

G

47

H49

H

50

H51

H

52

H53

I5

5 I5

6 J5

8 J5

9 J6

0 J6

1 J6

2 J6

3 K

6 4 K

6 5 K

6 6 Q

8 6 C

33

1

D35

1

2

E

36

E38

1

E

39

F41

26

F42

F

43

G45

4

G

46

1

G47

22

H49

H

50

1

5

H51

2

H

52

H53

1

I5

5

1

I5

6

J5

8

1

1

J5

9

2

8

J6

0

1

J6

1

2

1

10

1

1

J62

1

12

J6

3

K

64

1

1

1

2

1

31

4 3

1 K

65

13

K

66

1

N82

1

+C

33 –

K66

: C

33 -

Rep

air

and

inst

alla

tion

of m

achi

nery

and

equ

ipm

ent,

D35

- E

lect

rici

ty, g

as, s

team

and

air

con

ditio

ning

sup

ply,

E36

- W

ater

col

lect

ion,

trea

tmen

t and

sup

ply,

E37

– S

ewer

age,

E38

- W

aste

col

lect

ion,

trea

tmen

t and

dis

posa

l ac

tiviti

es; m

ater

ials

reco

very

, E39

- R

emed

iatio

n ac

tiviti

es a

nd o

ther

was

te m

anag

emen

t se

rvic

es, F

41 -

Con

stru

ctio

n of

bui

ldin

gs, F

42 -

Civ

il en

gine

erin

g, F

43 -

Spe

cial

ised

con

stru

ctio

n ac

tiviti

es, G

45 -

Who

lesa

le a

nd r

etai

l tra

de a

nd r

epai

r of

m

otor

veh

icle

s an

d m

otor

cycl

es, G

46 -

Who

lesa

le tr

ade,

exc

ept o

f mot

or v

ehic

les

and

mot

orcy

cles

, G47

- R

etai

l tra

de, e

xcep

t of m

otor

veh

icle

s an

d m

otor

cycl

es, H

49 -

Lan

d tr

ansp

ort a

nd tr

ansp

ort v

ia p

ipel

ines

, H50

- W

ater

tran

spor

t, H

51 -

Air

tr

ansp

ort,

H52

- W

areh

ousi

ng a

nd s

uppo

rt a

ctiv

ities

for

tran

spor

tatio

n, H

53 -

Pos

tal a

nd c

ouri

er a

ctiv

ities

, I55

– A

ccom

mod

atio

n, I

56 -

Foo

d an

d be

vera

ge s

ervi

ce a

ctiv

ities

, J58

- P

ublis

hing

act

iviti

es, J

59 -

Mot

ion

pict

ure,

vid

eo a

nd t

elev

isio

n pr

ogra

mm

e pr

oduc

tion,

sou

nd r

ecor

ding

and

mus

ic p

ublis

hing

act

iviti

es,

J60

- Pr

ogra

mm

ing

and

broa

dcas

ting

activ

ities

, J6

1 –

Tel

ecom

mun

icat

ions

, J6

2 -

Com

pute

r pr

ogra

mm

ing,

con

sulta

ncy

and

rela

ted

activ

ities

, J6

3 -

Info

rmat

ion

serv

ice

activ

ities

, K64

- Fi

nanc

ial s

ervi

ce a

ctiv

ities

, exc

ept i

nsur

ance

and

pen

sion

fund

ing,

K65

- In

sura

nce,

rei

nsur

ance

and

pen

sion

fund

ing,

exc

ept c

ompu

lsory

soc

ial s

ecur

ity, K

66 -

Act

iviti

es a

uxili

ary

to fi

nanc

ial s

ervi

ces

and

insu

ranc

e ac

tiviti

es

N82

: Offi

ce a

dmin

istr

ativ

e, o

ffice

sup

port

and

oth

er b

usin

ess

supp

ort a

ctiv

ities

, Q86

: Hum

an h

ealth

act

iviti

es.

Sou

rce:

Aut

hor’

s el

abor

atio

n.


Table 3: Interindustry & Intraindustry M&A matrix in Greece: Services – Crop – Aquaculture – Mining – Quarrying – Extraction, 1995–2011, as of

31 January 2011

Nace code: Acquiring

Nace code: Acquired

A1 A3 B9 M73 N79 Q86 R93

A1 1A3 2B7 1

M73 6N79 1Q86 3R93 1C13 1

the use of economic tools in merger analysis ......7 see generally, inter alia, m ivaldi and f...

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