when deciding to merge in addition to how both companies will reward shareholders it is important to take into consideration the federal trade commission s guidelines on keeping the industry competitive and avoiding the creation of monopolies 
it is important to ask whether a proposed merger will create or enhance market power or not an antitrust concern arises particularly with proposed horizontal mergers between direct competitors example of prorationsuppose a company decides to acquire a rival for 100 million which consists of 75 cash and 25 equity the cash equity split might undergo a revision if a majority of investors of the company being acquired elect to be paid in cash in that case the acquiring company will change its accounting figures in order to accommodate the demand for cash this will result in each investor of the acquired company receiving less cash than originally planned a firm for example may have to revise an original offer to buy back stock and reduce it by a factor of say two thirds in order to balance investor demand and its stock price at that time 