Competition after mergers near review thresholds

Abstract

Size thresholds determine whether a national authority reviews a merger and separate national and supranational responsibility. Firms could pursue competition-reducing mergers before they come under any regulatory oversight. Using data on German procurement auctions, I analyse competition effects near review thresholds. Four years after a merger, competition in procurement auctions decreases after mergers that are reviewed by the German national authority, relative to mergers below the threshold. However, when acquiror and target competed in procurement auctions before the merger, competition relatively increases after a German national merger review. Anti-competitive effects after nationally reviewed mergers without pre-merger activity in procurement may get unnoticed by the authority.