The success of divestitures in merger enforcement: Evidence from the J&J–Pfizer transaction

Despite being a widely used tool in merger enforcement, there have been few studies of whether antitrust divestitures are successful. We help fill this void by conducting a study of the divestitures relating to Johnson & Johnson's $16.6 billion acquisition of Pfizer's consumer health d...

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Bibliographic Details
Published inInternational journal of industrial organization Vol. 29; no. 2; pp. 273 - 282
Main Authors Tenn, Steven, Yun, John M.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.03.2011
Elsevier
Elsevier Sequoia S.A
SeriesInternational Journal of Industrial Organization
Subjects
Acquisitions
Acquisitions & mergers
Anti-trust legislation
Antitrust
Competition
Divestiture
Divestiture Antitrust Merger
Divestment
Economic performance
Market structure
Merger
Mergers
Pharmaceutical industry
Strategic planning
Studies
United States > US
L4
Merger
L1
Divestiture
Antitrust
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Summary:Despite being a widely used tool in merger enforcement, there have been few studies of whether antitrust divestitures are successful. We help fill this void by conducting a study of the divestitures relating to Johnson & Johnson's $16.6 billion acquisition of Pfizer's consumer health division in 2006. Six brands were divested in this matter to alleviate antitrust concern. For three of the brands, their pre- and post-divestiture performances are similar, while the remainder underwent changes that do not appear to be divestiture related. Overall, the results are consistent with the view that the divestitures maintained the pre-transaction level of competition.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0167-7187
1873-7986
DOI:10.1016/j.ijindorg.2010.07.003