DOI: 10.1111/joie.12373 ISSN: 0022-1821

Product Repositioning by Merging Firms*

Enghin Atalay, Alan Sorensen, Christopher Sullivan, Wanjia Zhu
  • Economics and Econometrics
  • General Business, Management and Accounting
  • Accounting

We examine merging firms' additions and removals of products for a sample of 66 mergers across a wide variety of consumer packaged goods markets. We find that mergers lead to a net reduction in the number of products offered by merging firms. Merging firms tend to both drop and add products at the periphery of their joint product portfolios, with the net effect of increasing within‐firm product similarity. These results are consistent with theories of the firm that emphasize cost synergies among similar types of products or managerial core competencies linked to particular segments of the product market.

More from our Archive