Consider a market that has three firms with the following market shares:
Firm A = 35 percent
Firm B = 41 percent
Firm C = 24 percent
Suppose firm B wants to acquire firm C so that the post-acquisition market would exhibit the following shares:
B + C = 65 percent
A = 35 percent
Calculate the pre and postmerger HHI, and the change in the HHI resulting from the merger. According to Department of Justice guidelines, is this merger likely to be challenged?