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Figure 8: Merger Settlements

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Figure 8
Merger Settlements

Case Product Number of
Firms		 HHI/Delta Plus Factors
Georgia-Pacific/
Domtar (1996)		 Gypsum board Merger of 3rd
and 4th firms in
4-to-3 market		 2700/400 Homogeneous products
Inelastic demand
History of coordination
Price signaling
Information exchange
New Holland/
Case (1999)		 Tractors, balers,
and windrowers		 Multiple 5-to-4
and 4-to-3
markets		 2885- 4460/
510-995		 Facilitating practices
History of tacit coordination
Information exchange
Eliminate maverick
Earthgrains/Metz (2000) White pan bread Two 3-to-2
and one 4-to-3
market		 3400-3800/
875-1530		 Homogeneous products
Inelastic demand
Stable demand and regular purchases
Eliminate maverick
History of coordination
Alcoa/Reynolds
(2000)		 Smelter and
chemical grade
alumina 		SGA: 6-to-5
CGA: 5-to-4		 SGA: 1800/531
CGA: 4222/1460		 Homogeneous product
Inelastic demand
History of signaling
History of coordination
Transparent information
Reynolds potential maverick
Alcoa excess capacity
Premdor/Masonite
(2001)		 Residential
doors		 3-to-2
upstream
market		 N/A Increased firm homogeneity
Eliminate maverick
History of coordination
Suiza/Broughton
(1999)		 School milk Multiple 3-to-2
markets defined
as single school
districts		 5,000/
1,667		 Inelastic demand
History of coordination
Public bid markets
Multimarket contacts
Updated September 17, 2015