Killer Acquisitions and the Blind Spot of Merger Control: Economic Logic, Contested Evidence, and Implications for Innovation Policy

Abstract

Acquisitions are usually hailed as growth drivers, but there is a significant minority that are the exact opposite it's a way to kill a future competitor. This article explores the phenomenon of killer acquisitions of smaller innovative firms by established firms, not to develop the acquired firm's projects but to kill them and to prevent the competition. Based on a qualitative synthesis of the peer-reviewed economics and law literature, regulatory reports and documented case evidence, the article elaborates on the reasons for such deals, the blind spots in merger control they exploit and their implications for economies, companies and citizens. The analysis focuses on the key empirical discovery that pharmaceutical projects acquired by firms with overlapping products were approximately 28.6 per cent less likely to be developed, and that an estimated 5.3-7.4 per cent of acquisitions in this sector took the form of a killer, often disguised as an acquisition just below the regulatory notification threshold. The article reviews challenged evidence in the technology industry, the balancing of merger enforcement and startup financing and global policy responses. It highlights the pitfalls of today's business management, discusses the gaps in existing studies,