This paper performs a pre-trial settlement analysis for the negotiation of asset
divestitures in merger control cases. Taking into account the asymmetric information
between the competition agency and the merging firms concerning the true competition
impact of the merger, we examine the impact on the likelihood of settlement
divestiture and the divestiture amount in equilibrium of various factors, such as the
transfer rate of the merger’s cost savings, the severity of the appeal court, as well as
the bargaining power of the merging partners in the sale of the divested assets.