Postmerger herfindahl hirschman index

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Assume Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, market for four wheel drive tractors consisted of 5-company's. The market was highly concentrated, with Herfindahl-Hirschman index of 3,025. Case's share of that market was 27 percent, while Fiat comprised just 13 percent of the market. If approved, by how much would the postmerger Herfindahl-Hirschman index increase? Based only on this information, do you think the Justice Department would challenge the merger? Explain?

Reference no: EM1367872

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