Market Reaction to Russian Merger Regulation

<p>The present research employs the event study methodology in order to quantitatively assess the merger regulation in Russia. We examined a sample of 230 transaction that took place between 2005 and 2014. Empirical results reveal no significant reaction to initial merger announcements. However, both merging companies and their rivals react negatively to the remedies implications by the Federal Antimonopoly Service. Further analysis of relationship between these two reactions demonstrated surprising findings. Remedies do not provide a systematic rent reversion and make only a one-time impact on merging companies. This result assumes the ineffective use of remedies in Russian merger control. We also found that merging firms and competitors positively respond to the decision of unconditional approval, which may indicate the type II errors made by Russian competition authority.&nbsp;</p>