Re: Libraries Urge Justice Departmen to Block Cinven and Candover Purchase of BertelsmannSpringer

[Phil Davis <pmd8@cornell.edu>]

There is some very good research illustrating the effect of mergers on
market prices.

In this article Journal Pricing and Mergers: A Portfolio Approach, Mark
McCabe analyzed price increases between 1988-2001 for 2,000 biomedical
titles and holdings for 194 libraries.  Based on his analysis, he writes

"the results suggest that price increases were substantial during the
sample period (1988-2001), that past mergers contributed to these
increases, and that these effects occurred in a broadly defined portfolio
market"

and as an example,

"The Reed Elsevier/Pergamon merger resulted in postmerger prices
(1992-1994) that exceeded the average in the market by 17 percent.  
Compared to these two firms' premerger prices -- about 7 percent higher
than the market on average -- the postmerger results suggest that the
merger increased prices about 10 percent".  p. 264

FULL CITATION
McCabe, M. J. (2002). Journal Pricing and Mergers: A Portfolio Approach. 
American Economic Review, 92(1), 259-269.
.

Philip Davis, Life Sciences Bibliographer
Mann Library, Cornell University, Ithaca, NY 14853
(607) 255-7192 ;  (607) 255-0318 fax
pmd8@cornell.edu
http://people.cornell.edu/pages/pmd8/