An examination of stock-price effects of EU merger control policy

This paper is an attempt at judging the impact of the adoption of EU merger controls and subsequent enforcement on European share prices of companies likely to have been affected. The event study approach is applied to both regime and case-specific effects. The regime effects are weak, and generally not statistically significant, but are suggestive of changed investor views of companies most likely to be affected, namely merger-prone multinationals or those in smaller countries without their own merger enforcement apparatus. The case effects appear stronger. We find that enforcement of the merger regulation has had substantial effects on individual company stock values. (C) 2000 Elsevier Science B.V. All rights reserved.