Ex post merger evaluation: Evidence from the Brazilian stock exchange

Resumen

The paper aims to analyse the (anti)competitive effects of a merger reviewed by the Brazilian competition Authority (CADE): a transaction between BM&FBOVESPA S.A. (BVMF) and CETIP S.A., originating B3 S.A. in 2017. The deal involved the industries of over-the-counter trade and stock, commodities, and futures exchanges. Applying the difference-in-differences and augmented synthetic control methods, this paper carries out an ex-post evaluation of the BVMF-CETIP merger. The results revealed a reduction in the B3's average trading fee in the stock exchange market after the merger. Moreover, robustness testing revealed similar results and, in some estimates, the coefficient for the merger effects was statistically equal to zero. Therefore, we did not identify any adverse competitive effects (relating to a raise in trading fees) as a consequence of the BVMF-CETIP merger. In view of the available literature on the topic, we seem to have filled an academic gap by conducting the empirical analysis of a merger in the stock market to assess its effect.