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 r egime and case-specific effects. The regime effects are weak, and generally not statistically significant, but are suggestive of changed investor view s of companies most likely to be affected, namely merger-prone multinationa ls or those in smaller countries without their own merger enforcement appar atus. The case effects appear stronger. We find that enforcement of the mer ger regulation has had substantial effects on individual company stock valu es. (C) 2000 Elsevier Science B.V. All rights reserved.