ANTITRUST POLICY AND MERGERS: THE WEALTH EFFECT OF SUPREME COURT DECISIONS

Many believe that antitrust policy has had a dramatic impact on merger strategies in the United States. For this to be true, enforcement of antitrust laws must affect a wide range of firms, not just those firms whose mergers are contested. This study tests whether or not firms engaged in uncontested mergers are affected by antitrust enforcement, as signalled by Supreme Court decisions. Using event study methodology, we find that antitrust policy against mergers was binding during the 1960s and 1970s as it ulowered the value of targets in ucontested ongoing mergers.