Abstract
Theoretical and legal issues posed by toehold acquisitions under Section 7 of the Clayton Act remain to be clarified by economists and by the courts.* In some circumstances a toehold acquisition is held to be permissible under the law when another acquisition or merger would not be permissible. The evolving toehold merger doctrine is an offshoot of potential competition doctrine, which is itself evolving and receiving judicial interpretation, not the least with respect to its toehold offshoot. As we shall see, two lower court decisions in 1976 and 1977, U.S. v. Black & Decker and McCulloch 1 and BOC International Ltd. v. FTC,2 suggest that the attitude of the courts will not necessarily be consistent with the best uses to which the economist would put the toehold doctrine. Although the potential competition doctrine itself may be accused of skirting paradox and causing confusion, it will be contended in this paper that the toehold doctrine when rightly understood resolves seeming paradoxes and cuts through confusion.
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© 1981 Martinus Nijhoff Publishing
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Carey, R. (1981). The Toehold Acquisition Doctrine: Economic Theory and Judicial Application. In: Sirkin, G. (eds) Lexeconics. Social Dimensions of Economics, vol 2. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-8141-6_12
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DOI: https://doi.org/10.1007/978-94-009-8141-6_12
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