How much would the postmerger herfindahl-hirschman index

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Case: 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 2,875. Case's share of that market was 16 percent, while Fiat comprised just 10 percent of the market.

Question 1. If approved, by how much would the postmerger Herfindahl-Hirschman index increase?

Question 2. Based only on this information, is the Justice Department likely to challenge the merger according to the Horizontal Merger Guidelines?

Reference no: EM133494903

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