(a) Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. The market was highly concentrated, with a Herfindahl-Hirschman index of 3,055. Case’s share of that market was 11 percent, while Fiat comprised just 5 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase?
(b) Based only on this information, is the Justice Department likely to challenge the merger according to the Horizontal Merger Guidelines?
Yes.
Possibly - but other factors will be considered.
No.