Assume the following market shares for bank deposits.

A B C D E F G

20% 19% 15% 15% 15% 14% 2%

a) Assume Bank B announces it will acquire Bank G to become the largest bank. Calculate the old HHI and the new HHI.

b) Assume Bank A wants to stay the largest bank and therefore decides to purchase as much of Bank F as they can at the same time Bank B makes its acquisition of Bank G. What is the maximum amount of market share Bank A can acquire from Bank F without being challenged? (Simultaneous mergers)

c) This time, Assume Bank A is patient and waits for Bank B to complete its acquisition of Bank G. Now Bank A decides to acquire as much as Bank F as possible without being challenged. How much market share can Bank A acquire? (Sequential mergers)