Divesting ownership in a rival

• Autores: Duarte Brito, Luís Cabral, Helder Vasconcelos
• Localización: International journal of industrial organization, ISSN 0167-7187, Vol. 34, Nº. 1, 2014, págs. 9-24
• Idioma: inglés
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• Resumen

  • We examine the consumer welfare effect of a firm's partial ownership of a competitor and compare the implications of alternative forms of divestiture. We identify conditions under which turning voting shares into non-voting shares is preferable to selling the shares to the firm's current shareholders (an option frequently chosen). We also show that selling the voting shares to a large independent shareholder is preferable to selling them to small shareholders. We provide additional theoretical results and apply them to the divestiture of Portugal Telecom's holdings in PTM.