Terms of the Deal Were Not Announced: Accounting for Mergers with Unpublicized Values

Most economy-wide studies of merger activity ignore deals whose terms are not announced. Using US data, I find that restricting attention to mergers with publicized values eliminates 60 percent or more of transactions. Exploiting a change in antitrust law, I find that mergers with unpublicized values are competitively significant. The data even suggest that these transactions reflect, at least in part, strategic attempts to avoid enforcement actions by escaping detection. Last, relying on an idiosyncratic feature of accounting standards to infer their size distribution, I find that ignoring mergers with unpublicized values undermeasures the extent of stealth consolidation by 40 percent.