Food Industry Mergers and Acquisitions Lead to Higher Labor Productivity

Processing plants in eight major food industries were highly productive before being acquired and they significantly improved their labor productivity afterward, Economic Research Service and U.S. Census Bureau researchers found in their analysis of Census data. The plant-level data on production inputs and costs provided a detailed picture of food-production facilities involved in mergers and acquisitions. The industries are meatpacking, meat processing, poultry slaughtering and processing, cheese making, fluid milk processing, flour milling, feed processing, and oilseed crushing. The analysis suggests that mergers and acquisitions contributed to the general improvement in labor productivity, echoing an earlier ERS study. Labor productivity is defined as output per worker.Mergers, acquisitions, labor productivity, consolidation, structural change, Agribusiness, Industrial Organization, Productivity Analysis,

Estimation and Identification of Merger Effects: An Application to Hospital Mergers

Advances in structural demand estimation have substantially improved economists' ability to forecast the impact of mergers. However, these models rely on extensive assumptions about consumer choice and firm objectives, and ultimately observational methods are needed to test their validity. Observational studies, in turn, suffer from selection problems arising from the fact that merging entities differ from non-merging entities in unobserved ways. To obtain an accurate estimate of the effect of consummated mergers, I propose a combination of rival analysis and instrumental variables. By focusing on the effect of a merger on the behavior of rival firms, and instrumenting for these mergers, unbiased estimates of the effect of a merger on market outcomes can be obtained. Using this methodology, I evaluate the impact of independent hospital mergers between 1989 and 1996 on rivals' prices. I find sharp increases in rivals' prices following a merger, with the greatest effect on the closest rivals. The results for this industry are more consistent with predictions from structural models than with prior observational estimates.

Higher Education Mergers in China: Lessons for Tanzanian Higher Education Institutions

Today, China stands out as a good example in terms of higher education institutional mergers, given its accumulated experience and great number of cases of university mergers compared to other countries around the world. This Paper aims to examine mergers in Chinese higher education institutions (CHEIs) by reviewing and analyzing an extensive body of literature on these CHEI mergers and drawing lessons for Tanzanian higher education institutions (THEIs). The study also aims to closely examine some critical aspects of CHEI mergers such as merger policies and restructuring strategies. From the analysis, the study uncovers five CHEI merger solutions, including: Joint Construction, Institutional Amalgamation, Cooperative Administration of Institutions, Transfer of Jurisdiction and Participation of Other Social Sectors in Institutional Operation, from which THEIs can draw inspiration as they lead to academic programs benefits, improved student enrollment, personnel benefits, educational quality enhancement, and financial resource benefits. It is hoped that this study will contribute to narrowing the research gap in university merger studies. It also has a potential to better assist higher education institutions, decision-makers, policy-makers and other higher education stakeholders in planning and implementing higher education merger policies. Keywords: Higher education mergers, Institutional Mergers, CHEIs, THEIs, Merger policies DOI: 10.7176/RHSS/11-2-09 Publication date: January 31st 202

Mergers and acquisitions in the construction industry: an exploratory study

Mergers and Acquisitions (M&A) are major strategic initiatives undertaken by many organisations. Within the construction context, these have been used, amongst others, to accelerate growth, reduce the effects of the construction cycle, enter into new markets, and spread risk. During the last decade, M&A were recognised as the preferred vehicle for expansion into the global construction market. Major European and international construction organisations use mergers or acquisitions to increase their geographical coverage and business portfolio. Mergers and Acquisitions impact on a number of organisational dimensions ranging from `soft' issues such as organisational culture to `hard' issues such as IT integration. Four specific aspects of mergers and acquisitions are investigated within this thesis. These are as follows: Strategy, Business Portfolio and Performance Measurement of construction organisations and the impact of M&A on subsequent performance; the Acquisition Strategy adopted for entering emerging markets such as Central and Eastern Europe; the Impact of Mergers and Acquisitions on construction companies' Information Systems and Information Technology (IS/IT); and an Investigation of Knowledge Management Strategies for organisations that have undergone mergers and acquisitions. The thesis adopts a qualitative research methodology. An extensive literature review was conducted on mergers and acquisitions with particular emphasis on its use within the construction sector. The literature review provided a sound basis for theory development and identified areas in which further understanding was requiired. A multiple case study approach was selected for each of the four aspects studied and the data was obtained using semi-structured interviews. Based on the case study data, analysis and discussion were conducted resulting in conclusions for each of the four aspects investigated. The research concluded that Mergers and Acquisitions were an important vehicle for construction organisations to achieve growth, and expand geographically into new markets and new sectors. However,. the implications of mergers and acquisitions need to be understood and the processes . before, during and after the merger or acquisition is finalised need to be carefully planned and communicated to the relevant parties. Mergers and Acquisitions'- can offer' tremendous advantage to an organisation and several recommendations are made regarditig how the process may be improved within the construction context

Confronting the Peppercorn Settlement in Merger Litigation: An Empirical Analysis and a Proposal for Reform

Shareholder litigation challenging corporate mergers is ubiquitous, with the likelihood of a shareholder suit exceeding 90%. The value of this litigation, however, is questionable. The vast majority of merger cases settle for nothing more than supplemental disclosures in the merger proxy statement. The attorneys that bring these lawsuits are compensated for their efforts with a court-awarded fee. This leads critics to charge that merger litigation benefits only the lawyers who bring the claims, not the shareholders they represent. In response, defenders of merger litigation argue that the lawsuits serve a useful oversight function and that the improved disclosures that result are beneficial to shareholders. This Article offers a new approach to assessing the value of these claims by empirically testing the relationship between merger litigation and shareholder voting on the merger. If the supplemental disclosures produced by the settlement of merger litigation are valuable, they should affect shareholder voting behavior. Specifically, supplemental disclosures that are, in effect, “compelled” by settlement should produce new and unfavorable information about the merger and lead to a lower percentage of shares voted in favor of it. Applying this hypothesis to a hand-collected sample of 453 large public company mergers from 2005-2012, we find no such effect. We find no significant evidence that disclosure-only settlements affect shareholder voting. These findings warrant a reconsideration of Delaware merger law. Specifically, under current law, supplemental disclosures are viewed by courts as providing a substantial benefit to the shareholder class. In turn, this substantial benefit entitles the plaintiffs’ lawyers to an award of attorneys’ fees. Our evidence suggests that this legal analysis is misguided and that supplemental disclosures do not in fact constitute a substantial benefit. As a result, and in light of the substantial costs generated by public company merger litigation, we argue that courts should reject disclosure settlements as a basis for attorney fee awards. Our approach responds to critiques of merger litigation as excessive and frivolous by reducing the incentive for plaintiffs’ lawyers to bring weak cases, but it would have an additional benefit. Current practice drags state court judges into the task of indirectly promulgating disclosure standards in connection with the approval of fee awards. We argue, instead, for a more efficient specialization between state and federal courts in the regulation of mergers: public company merger disclosure should be policed by the federal securities laws while state corporate law focuses on substantive fairness

Confronting the Peppercorn Settlement in Merger Litigation: An Empirical Analysis and a Proposal for Reform

Shareholder litigation challenging corporate mergers is ubiquitous, with the likelihood of a shareholder suit exceeding 90%. The value of this litigation, however, is questionable. The vast majority of merger cases settle for nothing more than supplemental disclosures in the merger proxy statement. The attorneys that bring these lawsuits are compensated for their efforts with a court-awarded fee. This leads critics to charge that merger litigation benefits only the lawyers who bring the claims, not the shareholders they represent. In response, defenders of merger litigation argue that the lawsuits serve a useful oversight function and that the improved disclosures that result are beneficial to shareholders. This Article offers a new approach to assessing the value of these claims by empirically testing the relationship between merger litigation and shareholder voting on the merger. If the supplemental disclosures produced by the settlement of merger litigation are valuable, they should affect shareholder voting behavior. Specifically, supplemental disclosures that are, in effect, “compelled” by settlement should produce new and unfavorable information about the merger and lead to a lower percentage of shares voted in favor of it. Applying this hypothesis to a hand-collected sample of 453 large public company mergers from 2005-2012, we find no such effect. We find no significant evidence that disclosure-only settlements affect shareholder voting. These findings warrant a reconsideration of Delaware merger law. Specifically, under current law, supplemental disclosures are viewed by courts as providing a substantial benefit to the shareholder class. In turn, this substantial benefit entitles the plaintiffs’ lawyers to an award of attorneys’ fees. Our evidence suggests that this legal analysis is misguided and that supplemental disclosures do not in fact constitute a substantial benefit. As a result, and in light of the substantial costs generated by public company merger litigation, we argue that courts should reject disclosure settlements as a basis for attorney fee awards. Our approach responds to critiques of merger litigation as excessive and frivolous by reducing the incentive for plaintiffs’ lawyers to bring weak cases, but it would have an additional benefit. Current practice drags state court judges into the task of indirectly promulgating disclosure standards in connection with the approval of fee awards. We argue, instead, for a more efficient specialization between state and federal courts in the regulation of mergers: public company merger disclosure should be policed by the federal securities laws while state corporate law focuses on substantive fairness

Do Mergers Improve Efficiency? Evidence from Restructuring the U.S. Electric Power Sector

This paper analyses the performance impact of the merger wave which took place in the US electricity industry during the period 1994-2003. It does so by analyzing the impact on operating and total cost in electricity distribution. While there are past studies of efficiency and productivity effects, as well as of prices, profits, and other outcomes, this study differs in several ways. First, the database consists of many merging and non-merging firms, rather than only a few on which to base inferences. Second, all of these mergers arise in a single industry, greatly facilitating controlled comparison. Third, we have data on the several years of pre-merger and post-merger efficiency of the specific merging units, unlike virtually all past studies. And finally, we employ a powerful nonparametric technique - data envelopment analysis - to measure the efficiency of each operating unit. The results indicate that electricity mergers are not consistent with improved cost performance

Revising the U.S. Vertical Merger Guidelines: Policy Issues and an Interim Guide for Practitioners

Mergers and acquisitions are a major component of antitrust law and practice. The U.S. antitrust agencies spend a majority of their time on merger enforcement. The focus of most merger review at the agencies involves horizontal mergers, that is, mergers among firms that compete at the same level of production or distribution. Vertical mergers combine firms at different levels of production or distribution. In the simplest case, a vertical merger joins together a firm that produces an input (and competes in an input market) with a firm that uses that input to produce output (and competes in an output market). Over the years, the agencies have issued Merger Guidelines that outline the type of analysis carried out by the agencies and the agencies’ enforcement intentions in light of state of the law. These Guidelines are used by agency staff in evaluating mergers, as well as by outside counsel and the courts. Guidelines for vertical mergers were issued in 1968 and revised in 1984. However, the Vertical Merger Guidelines have not been revised since 1984. Those Guidelines are now woefully out of date. They do not reflect current economic thinking about vertical mergers. Nor do they reflect current agency practice. Nor do they reflect the analytic approach taken in the 2010 Horizontal Merger Guidelines. As a result, practitioners and firms lack the benefits of up-to-date guidance from the U.S. enforcement agencies

Extensions to the Method of Multiplicities, with applications to Kakeya Sets and Mergers

We extend the "method of multiplicities" to get the following results, of interest in combinatorics and randomness extraction. (A) We show that every Kakeya set (a set of points that contains a line in every direction) in \F_q^n must be of size at least $q^n/2^n$. This bound is tight to within a $2 + o(1)$ factor for every $n$ as $q \to \infty$, compared to previous bounds that were off by exponential factors in $n$. (B) We give improved randomness extractors and "randomness mergers". Mergers are seeded functions that take as input $\Lambda$ (possibly correlated) random variables in $\{0,1\}^N$ and a short random seed and output a single random variable in $\{0,1\}^N$ that is statistically close to having entropy $(1-\delta) \cdot N$ when one of the $\Lambda$ input variables is distributed uniformly. The seed we require is only $(1/\delta)\cdot \log \Lambda$-bits long, which significantly improves upon previous construction of mergers. (C) Using our new mergers, we show how to construct randomness extractors that use logarithmic length seeds while extracting $1 - o(1)$ fraction of the min-entropy of the source. The "method of multiplicities", as used in prior work, analyzed subsets of vector spaces over finite fields by constructing somewhat low degree interpolating polynomials that vanish on every point in the subset {\em with high multiplicity}. The typical use of this method involved showing that the interpolating polynomial also vanished on some points outside the subset, and then used simple bounds on the number of zeroes to complete the analysis. Our augmentation to this technique is that we prove, under appropriate conditions, that the interpolating polynomial vanishes {\em with high multiplicity} outside the set. This novelty leads to significantly tighter analyses.Comment: 26 pages, now includes extractors with sublinear entropy los