A firm with 500 million in sales files to acquire a competitor for 100 million. Most (85 percent) of the competitor's business overlaps with the acquiring firm's operations in a market.
Post-merger, the concentration in that market would be 2500 and barriers to entry preclude new firms from entering in a timely manner (since barriers exist, set structure variable to 2500). However, the merger would create very significant efficiencies. As these cost savings exceed those associated with most transactions set the index to 30 (the index approached 60 for some cases in sample).
Estimate the FTC decision on this matter will occur in September 2000 (9/2000).
Summing up: