Sashimi M&As: Monopolization by a Thousand Acquisitions

Many competition authorities have provisions for transactions of “minor importance” where the parties involved can avoid mandatory pre-merger notification.  Several industries have seen merger waves whereby consolidator firms engage in a strategy of “strategic rollups” – the serial acquisition of many small firms within a highly fragmented industry (“Sashimi M&As”).  In this article the literature on sequential mergers is reviewed and three industry cases are examined.  It is found that there is a path dependency in merger sequences.  M&A series which start with the larger entities merged first should make competition regulators wary.  Furthermore, how the acquired entities are organized post-merger – that they continue to operate independently can be an indication of a consolidator intending to engage in future M&As within the relevant market.  While the individual transactions may not raise competition concerns, ultimately, the merger sequences may warrant the scrutiny of regulators.

By Mihkel Tombak^[1]

Many competition authorities have provisions for transactions of “minor importance” being able to avoid mandatory pre-merger notification. Such thresholds are understandable given the under budgeting of those antitrust regulatory bodies and the daunting caseloads of many regulatory bodies. Under the Hart Scott Rodino Antitrust Improvements Act of 1976 there is a size of transaction test, which the U.