Wave Of Consolidation Research Articles

Tungsten-Copper Composite Fabricated by Hot-Shock Consolidation

High-temperature shock consolidation and under-water shock wave are two effective methods to eliminate cracks generated when shock wave propagating the powder bed. In this work, a novel assembly consists of a chemical furnace and a water column was used to fabricate tungsten-copper composites. The heat released from the reaction of a SHS reaction mixture was used as chemical furnace to preheat the precursor powder. The water column as well as the explosive attached was detached from the furnace by a solenoid valve fixed on the slide guide. So the explosive and water column was kept cooling during the preheating process. The W-Cu powders with the grain size of 2μm were first blended with mass ratio of 9:1 by mechanically alloying in a planetary ball mill. Prior to application of shock wave, the elemental powders were preheated at different temperatures, i.e. the highest temperature up to 1000°C. The intensity of the shock wave loading was under 10GPa. The consolidated specimens were then characterized by microstructure analysis and micro-hardness testing. The different micromechanical behaviors of W and Cu phase in the consolidated sample were studied by using in situ high-energy X-ray diffraction technique. The result showed that a fine-grained 90W/10Cu composite with no cracks could be compacted to a density of 16.44g/cm3 by hot-shock consolidation at a preheating temperature of 970°C.

Revisiting the US food retail consolidation wave: regulation, market power and spatial outcomes

This paper revisits Neil Wrigley’s influential research that explored the corporate restructuring of the US food retail sector, which was characterised by a focus on the spatial implications of merger activity, market concentration and competition regulation. It assesses the importance of this scholarship in a contemporary context, tracking these competitive and regulatory trends from a decade ago to the present. This is of particular interest given the continued concentration of market power and related competitive shake-out; the innovative experimentation with new store formats; anti-trust rulings concerning market definition by the Federal Trade Commission (FTC); and the challenges faced by European entrants to the market.

Escape from Equilibrium: Thinking Historically about Firm Responses to Competition

Firms use a variety of strategies to limit competition that would otherwise erode profits. Firms innovate, creating new technologies, new markets, and new firms. Innovations allow them to distinguish their products or lower their costs and thus maintain profits. Their ability to innovate depends on the existence of social institutions that allow them to amass the resources—labor, capital, and information—necessary to compete successfully. Firms also maintain profits by manipulating the political process to maintain preferred access to markets, technology and resources. Finally, firms take actions to limit competition directly. Waves of consolidation, justified by an assumption of the inevitability of increasing firm size, have limited competition and entrepreneurship. Cartels and other forms of collusion, sometimes thought to have disappeared from US markets after the adoption of the Sherman Antitrust Act in 1890, are still active in a wide variety of national and international markets.

Escape from Equilibrium: Thinking Historically about Firm Responses to Competition

Firms use a variety of strategies to limit competition that would otherwise erode profits. Firms innovate, creating new technologies, new markets, and new firms. Innovations allow them to distinguish their products or lower their costs and thus maintain profits. Their ability to innovate depends on the existence of social institutions that allow them to amass the resources—labor, capital, and information—necessary to compete successfully. Firms also maintain profits by manipulating the political process to maintain preferred access to markets, technology and resources. Finally, firms take actions to limit competition directly. Waves of consolidation, justified by an assumption of the inevitability of increasing firm size, have limited competition and entrepreneurship. Cartels and other forms of collusion, sometimes thought to have disappeared from US markets after the adoption of the Sherman Antitrust Act in 1890, are still active in a wide variety of national and international markets.

Consolidation in the Exchange Industry: What are Exchanges Actually Worth? Some Evidence from a Crises Environment

It is generally acknowledged that the exchange industry shares the typical features of network industries, forcing exchanges to merge across countries. This process was first urged by the need to keep up with technological developments and increased competition from peers and new competitors. Starting 2005 and up to 2007 we observed significant cross border mergers within the securities industry leading to the creation of a few large groups with a diversified business model. It was questioned whether such mergers leaded to a stable equilibrium. Now, in the aftermath of the crisis a new wave of consolidation is taking place. The financial turmoil dramatically affected the market functioning delivering severe strains to the financial sector and modified the way of conducting business. We address the implications of the crisis on exchange’s values, investigating if expectations lying behind values have somewhat changed or compressed or reflect new opportunities.

The Importance of Technology in the Consolidation of Hospital Markets - The Case of the United States

Over the last few years technology has become a key element of competition in the hospital market. At the same time this market in the US has seen intense merger activity. In this study we analyze the role that technology can play in this consolidation wave by focusing on how it can affect a hospital's selection of a particular target. We analyze the selection of targets in mergers that took place in the US hospital market between 1985 and 2000. Our results show that technology is an important element for competition in the hospital market and, as such, also plays a relevant role in M&A strategies. We find that hospitals are more likely to choose targets that complement their technology base, especially when the acquired technologies are complex and have favourable cost/benefit ratios. As a result, the merged entity tends to become closer to a one-stop-shop hospital.

Bank mergers and acquisitions in emerging markets: evidence from Asia and Latin America

Following a global wave of consolidation in the banking industry, this study analyses 132 mergers and acquisitions (M&As) involving banks in emerging markets in Asia and Latin America between 1998 and 2009. An event study measures the change in shareholder value for acquirers and targets; and a multivariate regression identifies the drivers of the change in shareholder value for acquirers. On average M&As create shareholder value for target firms, while acquirer firms do not lose shareholder value. Geographical diversification creates shareholder value for acquirers. Acquirer shareholders benefit from the acquisition of underperforming targets; from transactions settled by cash rather than exchange of equity; and from government-instigated M&A transactions.

Bank Mergers and Acquisitions in Emerging Markets: Evidence from Asia and Latin America

Following a global wave of consolidation in the banking industry, this study analyses 132 mergers and acquisitions (MA and a multivariate regression identifies the drivers of the change in shareholder value for acquirers. On average MA from transactions settled by cash rather than exchange of equity; and from government-instigated M&A transactions.

Contemporary fiscal issues impacting M&A in the oil and gas sector

Ongoing growth in deal activity in the oil and gas industry is one of the critical forces underpinning the sustained robustness of the Australian economy. Australian oil and gas assets continue to attract significant international interest and are actively pursued by global and domestic investors alike. On the supply side, exploration players are seeking the necessary funding and technical support to commercialise prospective oil and gas discoveries, while on the demand side, major established oil and gas companies are seeking to acquire viable targets as a means of rapidly replenishing their reserves. Consequently, merger and acquisition (M&A) deals and asset trades have become a regular feature of the corporate oil and gas scene in Australia. In time to come, a wave of industry consolidation is likely to emerge. This paper discusses key fiscal aspects of M&A transactions, as affected by recent developments in the Australian taxation landscape, and their impact on the overall economics of, and extracting value from, an investment in the oil and gas sector, including: the taxation of farm-in/farm-out arrangements, asset swaps and carry arrangements; structuring the deal consideration for fiscal efficiency; takeover and acquisition vehicle structures; the M&A issues associated with the extension of the Petroleum Resource Rent Tax (PRRT) to the onshore oil and gas industry; consideration associated with capital management, capital structure and financing trends for the industry; exit and repatriation routes—do all roads lead to tax?; managing transaction costs; and, managing tax risks in M&A deals.

MARKET POWER, BANK MEGAMERGERS, AND THE WELFARE OF BANK BORROWERS

We assess the effects on the welfare of corporate borrowers of the recent wave of bank consolidations in the United States that has produced a small number of very large banks. Our evidence from a sample of more than 3,000 commercial borrowers from banks involved in large mergers indicates that the wealth effects on these borrowers are highly negative, statistically significant, and economically important. These negative investor perceptions seem to be driven largely by the expectation of changes in banks’ market power resulting from the mergers.

Banking Sector Performance in Latin America: Market Power versus Efficiency

AbstractSince the mid‐1990s the banking sector in the Latin American emerging markets has experienced profound changes due to financial liberalization, a significant increase in foreign investments, and greater merger activities often occurring following financial crises. The wave of consolidation and the rapid increase in market concentration that took place in most countries has generated concerns about the rise in banks' market power and its potential effects on consumers. This paper advances the existing literature by testing the market power (Structure–Conduct–Performance and Relative Market Power) and efficient structure (X‐ and scale efficiency) hypotheses for a sample of over 2500 bank observations in nine Latin American countries over 1997–2005. We use the Data Envelopment Analysis technique to obtain reliable efficiency measures. We produce evidence supporting the efficient structure hypotheses. The findings are particularly robust for the largest banking markets in the region, namely Brazil, Argentina, and Chile. Finally, capital ratios and bank size seem to be among the most important factors in explaining higher than normal profits for Latin American banks.

Can Industry Consolidation Lead to Greater Efficiencies? Evidence from the U.S. Defense Industry

The question of whether mergers in various industries lead to greater market power or improved efficiencies has been the subject of numerous public policy debates. This analysis focuses on the impact of consolidation in the U.S. defense industry over the past 20 years and examines the reasons behind the wave of defense consolidation, the results in terms of the reduction in contractors, the antitrust response to mergers, and evidence on the impact of the mergers on weapons systems’ total and per-unit costs. The analysis finds that merger activity was driven less by declines in spending following the Cold War than by a stronger economy and a vibrant financial market. The cost data show that 39 to 44 percent of systems experienced statistically significant change in either total costs or per-unit costs following a merger. Somewhat more systems were likely to exhibit lower postmerger per-unit costs than higher per-unit costs, suggesting improved efficiency. The analysis also examines the impact on weapon systems cost by type of weapons system, manufacturer, and service (Army, Navy, Air Force). The evidence suggested greater efficiencies following consolidation for many sectors. Army and Navy systems overall showed lower per-unit costs, but the Air Force weapons systems showed mixed results.

FRESH START FOR PHARMA

LIFE SCIENCES EXECUTIVES attending the annual JPMorgan Healthcare Conference in San Francisco last week exuded optimism that their industry is moving beyond a trying period. Smaller companies were hopeful that the financial turmoil has subsided, and bigger firms were keen to show they are getting back to business after a wave of consolidation. “A year ago, the pessimism was at every level,” said Steven R. Gullans, managing director of Excel Venture Management, which invests in small life sciences firms. Biotech entrepreneurs couldn’t raise money, bankers were worried about their jobs, and venture capitalists were wary of financing companies that may not produce a return for years, if ever, he said. Today, the capital markets seem to be coming back. And although the biotech crowd has thinned in the past year, investors predict that the modestly healthier financial climate will allow some of the survivors to go public this year. Meanwhile, big pharma still faces many ...

Recent Developments in EC Merger Control

The last two years have been a time of challenge and gradual change in EC merger control. First and foremost, the economic and financial downturn has left a deep but uneven mark. The number of merger filings dropped a little in 2008, and then significantly in 2009. The abandoned BHP Billiton/Rio Tinto transaction is a good illustration of how the crisis has affected merger activity. Not all industries have been equally affected, however. For example, the energy business has resisted well. The crisis has not prevented a wave of consolidation in certain sectors (e.g. aviation, energy, and pharmaceuticals), and has in fact been the cause of some mergers. The global financial and economic turmoil has also caused some EU Member States to take a more than usually active role in merger control, as illustrated by the Lloyds/HBOS merger in the United Kingdom (UK). The crisis has presented enforcers with a major challenge, generating intense pressure to clear mergers in record time. This has not, however, affected the substantive analysis. Banking mergers present a good example of the Commission handling cases quickly, taking into account the economic and financial climate, but without applying a lenient approach in its substantive review. Despite the reduced volume of new cases, the last two years have seen some important legal and policy developments in EC merger control. A number of high-tech merger decisions (including Google/DoubleClick, Nokia/Navteq, and TomTom/Tele Atlas) provide the first applications of the Commission’s recent NonHorizontal Merger Guidelines. These cases raised complex and novel issues, requiring extensive market investigation. The latest installment in the longrunning Sony/BMG saga confirms and clarifies the law in the field of collective dominance (nowadays usually referred to as ‘coordinated effects’). The Commission’s policy in respect of remedies has continued to become more rigorous. This is expressed in a new Remedies Notice, and may also be reflected in several remarkably strict decisions in the aviation industry, most notably the prohibition decision in Ryanair/Air Lingus. Overall, the current crisis has not affected the Commission’s remedies policy significantly: divestitures remain the benchmark and behavioural remedies are viewed with scepticism. Several recent merger decisions in the aviation and pharmaceutical industries (e.g. Iberia/Vueling/Clickair and Pfizer/ Wyeth) illustrate how the Commission’s policy on remedies has evolved. On the procedural front, the Commission recently imposed the highest fine to date for ‘gun jumping’, i.e. infringement of the standstill obligation provided for in the EC Merger Regulation (the ECMR or the Regulation) (Electrabel/Compagnie Nationale du Rhone). The Community Courts have issued several landmark judgments over the last year, including two (Schneider and MyTravel) relating to actions for

Escaping the pincer

An analysis of the past 60 years of pharmaceutical innovation suggests potential strategies to tackle the R&D productivity issues that underlie the latest wave of industry consolidation.

Prices and Network Effects in Two-Sided Markets: The Belgian Newspaper Industry

This paper investigates the two-sided nature of the newspaper industry. We explicitly take into account cross network effects that exist between advertisers and newspaper readers. On one side, advertisers' demand for publicity space depends on the number of newspaper readers and their characteristics. On the other side, readers' demand can be, positively or negatively, influenced by the number of advertisements. In addition, editors may own several newspapers and hence a variety of cross-market effects that result from changes in market prices exist. To estimate demand parameters for both sides of the market, a specific structural model is needed that takes into account those effects. We estimate network effects and price elasticities for Belgian newspaper publishers to assess market power and the degree of competition in the market, which experienced a large consolidation wave over the last decades. This allows us to evaluate a recent merger in the Belgian newspaper industry.

Which Credit Unions are Acquired?

Recent years have witnessed a wave of consolidation amongst US credit unions. Through hazard function estimations, this paper identifies the determinants of acquisition for credit unions during the period 2001-06. The hazard of acquisition is inversely related to both asset size and profitability, and positively related to liquidity. Growth-constrained credit unions are less attractive acquisition targets. Institutions with low capitalization and those with small loans portfolios relative to total assets are susceptible to acquisition. The investigation presents unique empirical evidence of a link between technological capability and the hazard of acquisition. During the period 2001-06, when there was sustained growth in the use of internet technology, credit unions with no website were at the highest risk of acquisition.

Mergers decision in Japanese small mutual banks: efficiency improvement or empire buildings?

With the number of bank consolidations increasing around the world since the 1990s, several studies have examined what factors drive banks to consolidate, and some argue that bank managers who have a motive of empire buildings choose mergers. In this study, we deal with mergers among Japanese small mutual banks (credit associations or Shinkin banks) during the period 1996 to 2005. Japanese credit associations have been experiencing an unprecedented wave of consolidation, with their number decreasing from 410 (March 1996) to 292 (April 2006). Interestingly, unlike stock companies, mutual companies are often expected to be weak in terms of disciplining managers. If so, mutual banks tend to choose inefficient mergers at the expense of other stakeholders. Here, we use the stochastic frontier approach (SFA) to obtain “cost efficiency” proxy. We find that while the efficiency of acquiring credit associations decreases during the merger period, mergers do ultimately improve efficiency. Based on our results we find that raising efficiency, not for building empires, is an important goal for such credit association mergers.

Changes in the banking system and small business lending

Since small businesses typically rely on small banks as their primary source of financing, there are concerns that the wave of bank consolidation of the 1990s may have reduced the availability of loans to small businesses in the US. Using a panel of state-level banking information over 1993–2002, this paper shows that the Riegle–Neal Interstate Banking and Branching Efficiency Act of 1994 reduced the number of small banks, but not the amount of small business lending. We also show that small banks are participating less in small business lending. These results imply that the bank-lending channel of the monetary transmission mechanism became less important in the US in the late 1990s as a result of more firms borrowing from large banks that are less sensitive to monetary shocks.

-30-: the collapse of the great American newspaper

-30-: The Collapse of Great American Newspaper, edited and with an introduction by Charles M. Madigan (Chicago: Ivan R. Dee, 2007) 256 pages, $26 (hardcover).The title is promising, and even first selection of this book boded well that here we have a collection with staying power that will be greater than sum of its parts and offer insights into dire straits newspaper industry in America now finds itself in. Certainly, there is a sore need for such a book because path to solving any complex crisis is first understanding both its causes and effects. But soon, reader is disappointed because this compendium of essays and articles fails in so many ways.For one, there is a certain level of failure inherent in a collection that employs contemporaneous commentaries and reports that have long moved past events being discussed. Many of these, of course, were of interest at time-I recall having read many of them when first published. But collecting them between covers of a book is like dressing them up with no place to go. One representative example of this is Rachel Smolkin's Company: Synergy's Broken Promise, which was published at beginning of 2007. Other than fact this is one more anecdote that puts lie to notion of synergy as panacea, this article built on Tribune company's purchase of Los Angeles Times already reads as stale. The same complaint about staleness can be lodged against Ken Auletta's Can Los Angeles Times Survive Its Owners? In addition, because it comes later in book, it reads as duplicative as it treads over much of same ground.However, Smolkin's piece does make one lasting impression that anyone who has worked in newspapers will recognize, and that is pushback from hidebound journalists who will not adapt to change that has nothing to do with debasing ideals of journalism. There, in that subsidiary theme, is grist for an exploratory essay that looks at fixtures of failure embedded in newspaper industry.Similarly, another disappointment of this collection is lack of any one article that explores failure of industry's publishers and editors in past two decades to look around corner, to adapt to change, and to innovate. There is much talk throughout this collection about inroads connected computer has made into readership. But no discussion pointedly deals with how industry-clinging to its traditions-sat by and watched itself being devoured from bottom line up. The one article that comes closest is Jack Shafer's Embracing Extinction: The 1970s and Newspaper Decline, which traces problems of industry back to 1970s when first signs of trouble began to be noticed. Near end of his essay, Shafer observes that while newspaper readership is down, the appetite for news is growing. And that, it seems to me, is a wedge for exploring another facet of travails of newspaper industry.That is not to say this collection fails to reference some contemporary attempts to innovate. One example is Michael Shapiro's excellent exegesis of rise and demise of a great newspaper in Heartbreak on Wheels: The Philadelphia Inquirer. But even here, we see seeds of industry's failure in a contemporary example of executive vision without articulation, which would again warrant further exploration.Several of these articles deal to one degree or another with exorbitant profit expectations of Wall Street and its analysts and effect this has had on journalism quality and newspaper industry as a whole. The best of these is promising first essay by Elizabeth M. Neiva. In a succinct eight pages, Money, Technology, Tax Law, and Trouble, first published in Business and Economic History in 1995, essay follows source of industry's problems from transition from labor-intensive Linotype machines to photocomposition machines operated by low-paid clerks, to revamp in newspaperlabor relations, to much higher profits, to subsequent changes in way newspapers were taxed from book value to market value, to subsequent wave of sell-offs and consolidation because of estate taxes, to demands of Wall Street for growth, which led to expansion into ancillary media areas and decline of quality journalism. …