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In the Matter of Weyerhaeuser Company: The Use of a Hold-Separate Order in a Merger with Horizontal and Vertical Effects

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  • Schumann, Laurence
  • Reitzes, James D
  • Rogers, Robert P

Abstract

This article examines Weyerhaeuser's acquisition of Menasha Corporation's west-coast corrugating medium and corrugated box operations. The Federal Trade Commission challenged the acquisition based on anticompetitive concerns arising from concentration in the corrugating medium market and ignored the potential for efficiencies in corrugated box production due to Weyerhaeuser's increased vertical integration. Our analysis also considers pricing behavior during the "hold-separate" period when the court attempted to maintain the acquired corrugating-medium mill as an "independent" entity. We find that the unfettered acquisition likely led to lower prices, and the hold-separate order may have created agency problems that permitted anticompetitive behavior and prevented efficiencies. Copyright 1997 by Kluwer Academic Publishers

Suggested Citation

  • Schumann, Laurence & Reitzes, James D & Rogers, Robert P, 1997. "In the Matter of Weyerhaeuser Company: The Use of a Hold-Separate Order in a Merger with Horizontal and Vertical Effects," Journal of Regulatory Economics, Springer, vol. 11(3), pages 271-289, May.
    • Handle: RePEc:kap:regeco:v:11:y:1997:i:3:p:271-89
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    Cited by:

    1. Robert W. Crandall & Clifford Winston, 2005. "Does antitrust policy improve consumer welfare? Assessing the evidence," Chapters, in: Colin Robinson (ed.), Governments, Competition and Utility Regulation, chapter 2, Edward Elgar Publishing.
    2. Orley Ashenfelter & Daniel Hosken & Matthew Weinberg, 2014. "Did Robert Bork Understate the Competitive Impact of Mergers? Evidence from Consummated Mergers," Journal of Law and Economics, University of Chicago Press, vol. 57(S3), pages 67-100.
    3. John Simpson & Christopher Taylor, 2008. "Do Gasoline Mergers Affect Consumer Prices? The Marathon Ashland Petroleum and Ultramar Diamond Shamrock Transaction," Journal of Law and Economics, University of Chicago Press, vol. 51(1), pages 135-152, February.

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