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A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures

Author

Listed:
  • John M. Barrios
  • Thomas G. Wollmann

Abstract

Antitrust authorities search public documents to discover anticompetitive mergers. Thus, investor disclosures may alert them to deals that would otherwise escape scrutiny, creating disincentives for managers to divulge transactions. We study this behavior in publicly traded US companies. First, we estimate a regression discontinuity that exploits mandatory disclosure thresholds stipulated by securities law. We find that releasing information to investors poses antitrust risk. Second, we present a method for measuring undisclosed merger activity that relies on financial accounting reporting requirements. We find that undisclosed mergers total $2.3 trillion between 2002 and 2016.

Suggested Citation

  • John M. Barrios & Thomas G. Wollmann, 2022. "A New Era of Midnight Mergers: Antitrust Risk and Investor Disclosures," NBER Working Papers 29655, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29655
    Note: CF IO
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    Cited by:

    1. McShane, William & Sevilir, Merih, 2023. "R&D tax credits and the acquisition of startups," IWH Discussion Papers 15/2023, Halle Institute for Economic Research (IWH).

    More about this item

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L0 - Industrial Organization - - General
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting

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