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Mergers & Acquisitions

Economists at The Brattle Group are experienced in all areas of antitrust merger review. We are often asked to assess the antitrust risks associated with a transaction prior to its review by an antitrust agency. When cases are filed, we assist the merging firms through the review process by using economic theory along with empirical data and relevant industry information to define markets, analyze competitive effects and entry, and assess efficiencies. For those cases where an antitrust agency is likely to seek relief, we evaluate remedies that would address the agency’s concerns. For cases that are challenged, we provide litigation support and expert testimony. We also have extensive experience assessing the strengths and weaknesses of the various analytical techniques used in merger analysis. These include the econometric analysis of consumer behavior using scanner data and consumer surveys, the analysis of “natural experiments” to define markets and assess competitive effects, and the use of oligopoly models, including simulations, to predict competitive effects.

The Brattle Group has analyzed the competitive impacts of hundreds of actual and potential mergers, acquisitions, and joint ventures in a variety of industries and in many jurisdictions. We have worked both for the merging parties and federal and state antitrust authorities, and provided expert reports and testimony in litigation surrounding alleged anticompetitive mergers and acquisitions. We have provided economic analyses in merger cases before the U.S. Department of Justice, Federal Trade Commission (FTC), Federal Communications Commission (FCC), Federal Energy Regulatory Commission (FERC), and state attorneys general, as well as the European Commission, the Court of First Instance, and national competition authorities in Australia, Canada, Germany, Spain, the Netherlands, and the United Kingdom.

Engagements
REPRESENTATIVE ENGAGEMENTS

Below is a list of representative engagements for our Mergers & Acquisitions practice.

Proposed mergers involving Comcast
Brattle economists provided testimony on behalf of a third party in several proposed transactions involving Comcast, including the recently proposed Comcast-Time Warner transaction. We performed an analysis of the FCC’s vertical foreclosure and Nash bargaining models applied to the proposed transaction.
Merger in the supermarket industry
A Brattle economist was retained by an interested third party in connection with a proposed merger of two large supermarket chains. Brattle obtained and analyzed industry data on store locations and sales, identified a number of relevant geographic markets where the proposed merger raised concerns regarding a lessening of competition under the Merger Guidelines, and suggested divestitures to resolve such concerns. Brattle’s findings were presented to the U.S. Federal Trade Commission as well as a state attorney general. The merger was permitted subject to a number of divestitures.
Analysis of Air Canada/United joint venture
Brattle economists provided economic analysis to the Competition Bureau in its review of the transborder joint venture between Air Canada and United-Continental. Brattle assessed the likely competitive effects of the transaction, including an econometric analysis of airline fare data that determined the fare impacts associated with past changes in market structure on transborder routes.
Analysis of price changes attributable to the Coors and Miller merger
For the joint venture between Coors and Miller, Brattle economists developed unilateral effects models to predict the magnitude of price changes from the merger within particular brand categories. As part of this analysis, we examined the extent to which a price increase in one brand would cause sales to be diverted to another brand. In addition, we estimated the savings in shipping costs that would result from the proposed acquisition. The DOJ chose not to challenge the joint venture based in part on the expected savings in shipping costs.
Duke Energy and Piedmont Natural Gas merger
On behalf of the merging parties, Brattle economists analyzed the competitive impact of Duke Energy’s acquisition of Piedmont Natural Gas for antitrust review by the Federal Trade Commission and “public interest” review by the North Carolina Utilities Commission. Our analysis examined the effect of the transaction on competition with respect to gas transportation and delivered gas in North Carolina and other areas, including allegations of potential “vertical” harm through partial foreclosure or the use of strategies to raise rivals’ costs.
Merger in European oil market

Brattle advised Nynas, a European specialty oils manufacturer, in the analysis of competition issues arising from its acquisition of an oil refinery from Shell. We assisted Nynas throughout the Phase II EC investigation that entailed defining the relevant geographic and product markets by analyzing the relative price movements of specialty oils in different geographic markets and between naphthenic and paraffinic substitutes. Application of the “small but significant and non-transitory increase in price” (SSNIP) test to the identified markets indicated that our client could not maintain a 10% price increase after the acquisition, as refineries in Europe could profitably compete within that price range, and customers would have incentive to switch to alternative oil products. Our analysis was presented to the European Commission which cleared the merger, without remedies, following an in-depth Phase II investigation.

EU retail bank merger
A Brattle principal advised BCP, one of the largest retail banks in Europe, in connection with an in-depth investigation carried out by the Portuguese competition authority of a proposed merger with BPI, one of its smaller rivals. Economic analysis entailed evaluating the effect of the proposed merger on the price and quantity of different banking products in the retail and small business banking sectors. Also investigated the role of other competitors to determine the extent to which they might, or otherwise, constrain the ability of the merged entity to raise prices and/or restrict output.
Merger in the hazardous waste landfill industry

While seconded to the Competition Bureau, a current Brattle principal consulted with the Bureau on its review of an acquisition of a hazardous waste landfill in northeastern British Columbia. This work included developing theories of harm, empirically estimating the anticompetitive effects from the merger, calculating the deadweight loss associated with the transaction and assisting with testimony before the Competition Tribunal. It also involved assisting with the Bureau’s submissions before the Federal Court of Appeal and the Supreme Court of Canada.

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