Unilateral E¤ects Screens for Partial Horizontal Acquisitions: The Generalized HHI and GUPPI

Recent years have witnessed an increased interest, by competition agencies, in assessing the competitive e¤ects of partial acquisitions. We propose a generalization to a partial horizontal acquisition setting of the two most traditional indicators used to screen unilateral anti-competitive e¤ects: the Hel\u85ndahl-Hirschman Index and the Gross Upward Price Pressure Index. The proposed generalized indicators can deal with all types of acquisitions that may lessen competition in the industry: acquisitions by owners that are internal to the industry (rival \u85rms) and engage in cross-ownership, as well as acquisitions by owners that are external to the industry and engage in common-ownership. Furthermore, these indicators can deal with direct and indirect acquisitions, which may or may not correspond to control, and nest full mergers as a special case. We provide an empirical application to several acquisitions in the wet shaving industry. The results seem to suggest that (i) a full merger induces higher unilateral anti-competitive e¤ects than a partial controlling acquisition involving the same \u85rms, (ii) a partial controlling acquisition induces higher unilateral anti-competitive e¤ects than a partial non-controlling acquisition involving the same rms and the same \u85nancial stakes, and (iii) an acquisition by owners that are internal to the industry induces higher unilateral anti-competitive e¤ects than an acquisition (involving the same \u85rms and the same stakes) by external owners that participate in more than one competitor \u85rm