Figure 9: Merger Abandonments

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Figure 9
Merger Abandonments

Case Product Number of
Firms
HHI/Delta Plus Factors
Northwest/
Continental
(1998)
Airlines Partial acquisition
involving 1st and
2nd largest firms
on some routes
Depending on
route market:
4500 to 10000 /
2380 to 4870
Eliminate maverick
Homogenous products
Information exchange
History of tacit collusion
Barriers to entry
Partial ownership stake
British Airways/
American Airlines
(2001)
Airlines Antitrust
Immunity on
multiple 5-to-4,
4-to-3, 2-to-1
markets
N/A Homogenous products
Information exchange
History of tacit coordination
Barriers to entry
Multi-market contact
United/
US Airways
(2001)
Airlines Multiple 4-to-3,
3-to-2, 2-to-1
markets
N/A Homogenous products
Information exchange
History of tacit coordination
Barriers to entry
Multi-market contact
Formica/
International Paper
(1999)
High pressure laminate Merger of 2nd
and 3rd largest
in a 4 firm market
3850/670 Acquired firm was a possible maverick
Homogeneous products
Price matching policies
Barriers to entry
Inelastic demand
Competitive fringe had limited ability to expand
Updated September 17, 2015

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