Corporate acquisitions can pose serious competitive threats to the target’s rivals. Although the existing literature suggests that rivals respond to these threats by adapting their market strategy in the post-acquisition period, it has not yet considered the possibility that rivals might try to sabotage these deals during the acquisition process. In this paper, we hypothesize that the target’s rivals may lobby antitrust agencies to block an announced deal. These lobbying efforts should reduce the probability of deal completion and cause delays in deal completion. These effects should be stronger with horizontal deals, because, with such deals, it is easier for the rivals’ lobbyists to make the case that the deal would have anticompetitive effects. In contrast, these effects should be weaker when the acquirer itself engages in antitrust lobbying in its favor. Examining a sample of deals between U.S. public companies during 2008–2020, we find empirical support for our hypotheses. Findings from this study extend nonmarket strategy by highlighting that firms may engage in corporate political activities in an effort to derail rivals’ strategic actions.
