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The Union Pacific/Southern Pacific Rail Merger: A Retrospective on Merger Benefits

The Review of Network Economics

Vol. 3, Issue 3 - September 2004, pp 283-322

  Denis A. Breen
Bureau of Economics, Federal Trade Commission
E-mail: [email protected]

  This retrospective case study of merger efficiencies focuses on the 1996 merger of two large, U.S. rail networks. Information on the public record permits some evaluation of pre-merger efficiency claims, and the weighing of those claims against regulatory and antitrust standards. Access to additional public and non-public information also permits at least a preliminary determination that a number of the claimed efficiencies were plausibly merger-specific and actually realized post-merger. This is contrary to skepticism expressed about merger efficiency claims, both generally and with respect to this particular rail merger, and thereby illustrates the value of doing retrospective studies of merger outcomes.

Keywords: Mergers, Efficiencies, Railroads, Union Pacific, Southern Pacific

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