Merger Challenges Data,
Fiscal Years 1999—2003
Issued by the
Federal Trade Commission
and the
U.S. Department of Justice
December 18, 2003
The Horizontal Merger Guidelines promulgated by the U.S. Department of
Justice and the Federal Trade Commission state that "market shares and
concentration data provide only the starting point analyzing the competitive impact
of a merger." Nevertheless, the market share and concentration levels at which the
Agencies have challenged mergers are significant. Although large market shares
and high concentration by themselves are an insufficient basis for challenging a
merger, low market shares and concentration are a sufficient basis for not
challenging a merger. To promote transparency in merger enforcement, the
Agencies have reviewed their enforcement decisions during fiscal years 1999—2003
and tabulated the market share and concentration levels associated with decisions
to challenge mergers. Results of that review are presented in the tables below.
Mergers were deemed to have been challenged by the Commission if it voted
to challenge the transaction (either in court or administratively). Mergers were
deemed to have been challenged by the Department if a complaint was filed in court
or a press release was issued by the Department announcing that the transaction had
been abandoned or restructured in response to the Department's concerns. In
addition, mergers involving financial institutions subject to the Bank Merger Acts of
1960 and 1966 or the Bank Merger Holding Company Act were deemed to have been
challenged by the Department if the transactions were restructured to satisfy the
Department's concerns, even absent a press release.
The data tabulations employ the two share and concentration measures used
by the Guidelines--the Post-Merger HHI and the Change in the HHI. The HHI is
the Herfindahl-Hirschman Index of market concentration, which consists of the sum
of the squares of the market shares of the competitors in the relevant market. The
Change in the HHI measures the impact of a merger in terms of the shares of the
merging competitors. It is computed as twice the product of their market shares. If
the merger did not itself change any competitors' market share, the Change in the
HHI would indicate the increase in the HHI the merger would cause. The Post-Merger HHI is the Pre-Merger HHI plus the Change in the HHI.
Because market shares and concentration are most significant in evaluating
straightforward horizontal competitive effects concerns, omitted from the data are
mergers, or individual relevant markets, in which a challenge was based on other
theories of competitive effects. These other theories include those based on vertical
control or monopsony power, as well as horizontal competitive effects theories, if the
competition eliminated was potential, rather than actual, competition or the
competitive concerns stemmed from influence through partial ownership and
aspects of corporate governance.
Data for some cases, and some individual relevant markets, are unavailable.
In a relative handful of cases, the Agencies never determined both the market shares
of the merging firms and the level of market concentration. This is not to say that the
Agencies had made no evaluation of the state of competition or competitive roles
played by the merging firms, but rather only that such notions were not quantified
with the completeness and precision that justifies inclusion in the data.
The data tabulated in Table 1 reflect 173 mergers and 1263 relevant markets.
While not explicit from the table, it may also be of interest to note that the lowest
Post-Merger HHI for any of these markets is slightly above 1400, and the lowest
Change in the HHI is approximately 85.
As indicated by Table 2, most of the mergers were challenged in just one or
a few relevant markets, while a small number were challenged in very many
relevant markets. The mergers with large numbers of markets tend to be
concentrated in particular industries. The Department's merger challenges in the
dairy and telecommunications industries account for 396 relevant markets from just
8 mergers. The Federal Trade Commission's merger challenges in the grocery
retailing and petroleum industries account for 305 relevant markets from 17 mergers.
Data for each of these four industries are separately tabulated in Tables 3—6.
Tables 7—9 contain separate tabulations for the Department's merger
challenges in the banking and waste disposal industries, and for the Commission's
merger challenges in the chemical/pharmaceutical industry. These industries
account for a total of 49 challenged mergers with 229 relevant markets. Finally,
Table 10 tabulates the data for all the relevant markets not included in Tables 3—9.
Table 1. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the Agencies Challenged Mergers
Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
17 |
18 |
19 |
3 |
0 |
0 |
0 |
57 |
| 1,799—1,999 |
0 |
7 |
5 |
14 |
14 |
0 |
0 |
0 |
40 |
| 2,000—2,399 |
1 |
1 |
7 |
32 |
35 |
2 |
0 |
0 |
78 |
| 2,400—2,999 |
1 |
5 |
6 |
18 |
132 |
34 |
1 |
0 |
197 |
| 3,000—3,999 |
0 |
3 |
4 |
16 |
37 |
63 |
53 |
0 |
176 |
| 4,000—4,999 |
0 |
1 |
3 |
16 |
34 |
30 |
79 |
0 |
163 |
| 5,000—6,999 |
0 |
2 |
4 |
16 |
9 |
14 |
173 |
52 |
270 |
| 7,000+ |
0 |
0 |
0 |
2 |
3 |
10 |
44 |
223 |
282 |
| total |
2 |
36 |
47 |
133 |
267 |
153 |
350 |
275 |
1263 |
|---|
Table 2. Agency Merger Challenges During Fiscal Years
1999—2003 Categorized by Number of Relevant Markets
|
| Number of Relevant
Markets in Challenge |
Number of
Mergers |
Total
Relevant Markets |
|---|
|
| 1 |
76 |
76 |
| 2—4 |
50 |
141 |
| 5—15 |
32 |
239 |
| 16—59 |
10 |
333 |
| 60+ |
5 |
474 |
|
| |
173 |
1263 |
|
Table 3. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the U.S. Department of Justice Challenged Mergers in the Dairy Industry
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 1,799—1,999 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 2,000—2,399 |
0 |
0 |
0 |
0 |
0 |
1 |
0 |
0 |
1 |
| 2,400—2,999 |
0 |
0 |
0 |
0 |
0 |
2 |
1 |
0 |
3 |
| 3,000—3,999 |
0 |
0 |
0 |
0 |
0 |
0 |
9 |
0 |
9 |
| 4,000—4,999 |
0 |
1 |
0 |
0 |
1 |
0 |
7 |
0 |
9 |
| 5,000—6,999 |
0 |
0 |
0 |
0 |
0 |
0 |
88 |
1 |
89 |
| 7,000+ |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
71 |
71 |
| total |
0 |
1 |
0 |
0 |
1 |
3 |
105 |
72 |
182 |
|---|
Table 4. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the Federal Trade Commission Challenged Mergers in the Grocery Industry
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 1,799—1,999 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 2,000—2,399 |
0 |
0 |
0 |
5 |
5 |
0 |
0 |
0 |
10 |
| 2,400—2,999 |
1 |
3 |
3 |
5 |
13 |
3 |
0 |
0 |
28 |
| 3,000—3,999 |
0 |
1 |
1 |
2 |
8 |
10 |
8 |
0 |
30 |
| 4,000—4,999 |
0 |
0 |
0 |
1 |
2 |
1 |
12 |
0 |
16 |
| 5,000—6,999 |
0 |
0 |
0 |
0 |
0 |
0 |
5 |
5 |
10 |
| 7,000+ |
0 |
0 |
0 |
0 |
0 |
0 |
1 |
5 |
6 |
| total |
1 |
4 |
4 |
13 |
28 |
14 |
26 |
10 |
100 |
|---|
Table 5. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the Federal Trade Commission Challenged Mergers n the Petroleum Industry
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
17 |
18 |
17 |
3 |
0 |
0 |
0 |
55 |
| 1,799—1,999 |
0 |
5 |
5 |
12 |
12 |
0 |
0 |
0 |
34 |
| 2,000—2,399 |
1 |
0 |
5 |
15 |
23 |
1 |
0 |
0 |
45 |
| 2,400—2,999 |
0 |
1 |
0 |
4 |
13 |
12 |
0 |
0 |
30 |
| 3,000—3,999 |
0 |
1 |
1 |
1 |
3 |
11 |
4 |
0 |
21 |
| 4,000—4,999 |
0 |
0 |
1 |
0 |
0 |
0 |
0 |
0 |
1 |
| 5,000—6,999 |
0 |
0 |
1 |
0 |
1 |
0 |
5 |
2 |
9 |
| 7,000+ |
0 |
0 |
0 |
0 |
1 |
2 |
0 |
7 |
10 |
| total |
1 |
24 |
31 |
49 |
56 |
26 |
9 |
9 |
205 |
|---|
Table 6. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the U.S. Department of Justice Challenged Mergers in the Telecommunications Industry
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 1,799—1,999 |
0 |
1 |
0 |
0 |
0 |
0 |
0 |
0 |
1 |
| 2,000—2,399 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 2,400—2,999 |
0 |
0 |
0 |
0 |
61 |
0 |
0 |
0 |
61 |
| 3,000—3,999 |
0 |
0 |
0 |
4 |
3 |
3 |
0 |
0 |
10 |
| 4,000—4,999 |
0 |
0 |
0 |
9 |
18 |
11 |
8 |
0 |
46 |
| 5,000—6,999 |
0 |
1 |
2 |
14 |
5 |
3 |
20 |
21 |
66 |
| 7,000+ |
0 |
0 |
0 |
0 |
0 |
4 |
8 |
18 |
30 |
| total |
0 |
2 |
2 |
27 |
87 |
21 |
36 |
39 |
214 |
|---|
Table 7. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the U.S. Department of Justice Challenged Mergers in the Banking Industry
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
0 |
0 |
2 |
0 |
0 |
0 |
0 |
2 |
| 1,799—1,999 |
0 |
1 |
0 |
2 |
1 |
0 |
0 |
0 |
4 |
| 2,000—2,399 |
0 |
1 |
2 |
11 |
4 |
0 |
0 |
0 |
18 |
| 2,400—2,999 |
0 |
0 |
3 |
7 |
8 |
6 |
0 |
0 |
24 |
| 3,000—3,999 |
0 |
0 |
0 |
4 |
9 |
6 |
7 |
0 |
26 |
| 4,000—4,999 |
0 |
0 |
1 |
1 |
2 |
2 |
8 |
0 |
14 |
| 5,000—6,999 |
0 |
0 |
0 |
0 |
0 |
0 |
6 |
3 |
9 |
| 7,000+ |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
9 |
9 |
| total |
0 |
2 |
6 |
27 |
24 |
14 |
21 |
12 |
106 |
|---|
Table 8. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the Federal Trade Commission Challenged Mergers in the Chemical or Pharmaceutical Industries
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 1,799—1,999 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 2,000—2,399 |
0 |
0 |
0 |
1 |
1 |
0 |
0 |
0 |
2 |
| 2,400—2,999 |
0 |
0 |
0 |
1 |
0 |
1 |
0 |
0 |
2 |
| 3,000—3,999 |
0 |
0 |
0 |
0 |
1 |
2 |
4 |
0 |
7 |
| 4,000—4,999 |
0 |
0 |
0 |
0 |
3 |
3 |
5 |
0 |
11 |
| 5,000—6,999 |
0 |
1 |
0 |
0 |
0 |
1 |
4 |
1 |
7 |
| 7,000+ |
0 |
0 |
0 |
1 |
1 |
0 |
3 |
18 |
23 |
| total |
0 |
1 |
0 |
3 |
6 |
7 |
16 |
19 |
52 |
|---|
Table 9. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the U.S. Department of Justice Challenged Mergers in the Waste Disposal Industry
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 1,799—1,999 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 2,000—2,399 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 2,400—2,999 |
0 |
0 |
0 |
1 |
4 |
4 |
0 |
0 |
9 |
| 3,000—3,999 |
0 |
0 |
1 |
2 |
4 |
6 |
6 |
0 |
19 |
| 4,000—4,999 |
0 |
0 |
1 |
2 |
2 |
5 |
9 |
0 |
19 |
| 5,000—6,999 |
0 |
0 |
0 |
0 |
1 |
1 |
8 |
3 |
13 |
| 7,000+ |
0 |
0 |
0 |
0 |
0 |
0 |
2 |
8 |
10 |
| total |
0 |
0 |
2 |
5 |
11 |
16 |
25 |
11 |
70 |
|---|
|
Table 10. Data for Fiscal Years 1999—2003 on Individual Relevant Markets in Cases in which the Agencies Challenged Mergers Not Included in Tables 3—9
| Post-Merger
HHI |
Change in the HHI |
|---|
| 0—99 |
100—199 |
200—299 |
300—499 |
500—799 |
800—1,199 |
1,200—2,499 |
2,500+ |
total |
|---|
| 0—1,799 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| 1,799—1,999 |
0 |
0 |
0 |
0 |
1 |
0 |
0 |
0 |
1 |
| 2,000—2,399 |
0 |
0 |
0 |
0 |
2 |
0 |
0 |
0 |
2 |
| 2,400—2,999 |
0 |
1 |
0 |
0 |
33 |
6 |
0 |
0 |
40 |
| 3,000—3,999 |
0 |
1 |
1 |
3 |
9 |
25 |
15 |
0 |
54 |
| 4,000—4,999 |
0 |
0 |
0 |
3 |
6 |
8 |
30 |
0 |
47 |
| 5,000—6,999 |
0 |
0 |
1 |
2 |
2 |
9 |
37 |
16 |
67 |
| 7,000+ |
0 |
0 |
0 |
1 |
1 |
4 |
30 |
87 |
123 |
| total |
0 |
2 |
2 |
9 |
54 |
52 |
112 |
103 |
334 |
|---|
|
