Involvement by Econex (now FTI Consulting) in Recent Mergers
Econex, as of 1 March 2019, has joined FTI Consulting. The team* continues their work on merger transactions and all other competition matters (including abuses of dominance and market inquiries). Specific to merger transactions, any potential merger has to be evaluated along two main dimensions, assessing the likelihood of unilateral and coordinated effects.1 Economists play an important role in these assessments.
As an illustration of some of this work, the Competition Commission (‘the Commission’) has recently approved three of the transactions that Econex advised on. These transactions relate to three of the sectors in which Econex has a wealth of experience – healthcare, telecommunications, and energy. This article outlines these three mergers. In all cases Econex advised the merging parties on relevant economic aspects and assisted with their submissions to the Commission.
*The Econex Team that contributed to these mergers: Nicola Theron, Helen Kean, Helanya Fourie, Willem van Lill, Albertus van Niekerk, Paula Armstrong, Elize Rich, Jonathan Jayes.
1. Unilateral effects, arise where, as a result of the merger, competition between the products of the merging firms is eliminated, allowing the merged entity to unilaterally exercise market power, for instance by profitably raising the price of one or both merging parties’ products, thus harming competition. Coordinated effects arise where, under certain market conditions (market transparency, product homogeneity, etc.) the merger increases the probability that, post-merger, merging parties and their competitors will successfully be able to coordinate their behavior in an anti-competitive way, for example, by raising prices.