Challenges for Economic Analysis of Mergers Between Potential Competitors: Steris and Synergy

Potential competition mergers occur when one of the parties of a proposed merger is already competing in a particular market while the other merging party has not yet entered that market. Under a potential competition theory of harm, a merger between two companies may harm competition if, absent the merger, one of the merging firms would enter the relevant market and compete with its proposed merger partner, which is already an incumbent in the relevant market. The theory of harm in potential competition cases hinges on the predicted increase in future competition that consumers in a relevant market may be denied as a result of the merger.