Web authoring software merger
Mergers & Acquisitions
CRA economists were retained to assist in a multibillion dollar acquisition involving two leading developers of Web authoring and vector graphic illustration software, products that are used to develop content for print, video, and the World Wide Web. To address agency concerns that the merger could reduce innovation, CRA’s team developed a specialized method of analysis to show that the primary effects of recent product innovation by one of the merging parties were to retain existing customers and, to a much lesser extent, attract users of low-end products as well as nascent users; there was virtually no diversion of sales from the other merging party. Citing this evidence, the merging parties argued that any concerns about reduced innovation were greatly outweighed by the sizable merger synergies. The Department of Justice ultimately cleared the transaction without divestitures.