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Product Repositioning by Merging Firms

Author

Listed:
  • Enghin Atalay
  • Alan Sorensen
  • Christopher Sullivan
  • Wanjia Zhu

Abstract

We examine merging firms' additions and removals of products for a sample of 66 mergers across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by merging firms. Merging firms tend to both drop and add products at the periphery of their joint product portfolios, with the net effect of increasing within‐firm product similarity. These results are consistent with theories of the firm that emphasize cost synergies among similar types of products or managerial core competencies linked to particular segments of the product market.

Suggested Citation

  • Enghin Atalay & Alan Sorensen & Christopher Sullivan & Wanjia Zhu, 2024. "Product Repositioning by Merging Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 72(2), pages 868-908, June.
    • Handle: RePEc:bla:jindec:v:72:y:2024:i:2:p:868-908
    DOI: 10.1111/joie.12373
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    JEL classification:

    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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