5.2 Mergers and Acquisitions: Assessment and Control

Merger control asks the before/after question: will concentration materially reduce competition? 1. Notification: transactions crossing the Act's thresholds report for clearance (Nepal's 2063 Act's acquisition-control scheme; the EU/US regimes' size-of-transaction tests). 2. Assessment: market shares post-merger; unilateral effects (the merged firm's new pricing power); coordinated effects (the remaining oligopoly's easier collusion); entry (can new rivals discipline?); efficiencies (the merger's cost savings — credible, merger-specific, passed through?). 3. Outcomes: clearance; conditional clearance (divestiture, access commitments); prohibition. 4. The failing-firm defence: the merger that prevents exit — the weak defence (would the market really lose both?). 5. Killer acquisitions: buying the future rival (the nascent-competitor theory of the FTC v. Facebook era — Unit 8's cases).