​Resumo WP n.º 32:
We develop a methodology for evaluating competition and welfare when shareholders hold (partial) positions in more than one competitor. We consider different models of product market competition and shareholder control. In each case, we derive consumer welfare as a function of shareholding Herfindahl indexes. We then apply our results to estimate the effect on consumer welfare of Portugal Telecom's (PT) divestiture of its subsidiary, PT Multimedia (PTM). Our results indicate that a sale to independent shareholders benefits consumers considerably compared to a sale to current shareholders, as proposed by PT. Moreover, the impact of the divestiture is drastically different depending on whether PT's share is sold to PT's shareholders or PTM's shareholders..

Texto:
After the Introduction, Section 2 lays out the formal framework. Section 3 presents a few general results. In Section 4, we apply these results to the case of Portugal Telecom. Section 5 concludes the paper.