Co-insurance effect

When two firms merge, the probability of default on either firm’s debt decreases. This theorem is believed to be proven by financial history; others, however, rightly dispute its generality. – See Blind-Deaf Connection, Mergers and Acquisitions, Landesbanken, Verticalization.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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