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We show that a horizontal merger can have differential price effects on customer segments depending on their supplier switching costs.

Fifteen percent drop in local demand observed after acquisitions of local breweries by large firms. A large stream of literature shows that the emotional bond between consumer and brand can induce a sense of psychological ownership, and shocks to this relationship, such as brand repositioning or acquisitions, can induce a negative consumer reaction. This article provides a large-scale empirical study on such brand "transgressions" in the context of acquisition of local breweries by large conglomerates. Our analysis covering 40 brand acquisitions shows a strong negative reaction to acquisitions on social media. Analysis of transaction data shows that this adverse sentiment results in a 15% drop in baseline demand in the local market following the acquisition. This represents a significant negative shock to the acquired brand, as the local region accounts for more than one-fifth of brand sales on average, even in the long run. The decline begins immediately following the acquisition and manifests in both sales and product ratings. Our findings indicate a more pronounced reaction to acquisitions by "big business" and provide evidence of demand spillover in the home market to competing brands that remain locally owned. The theoretical and managerial implications of our findings are discussed. History: Catherine Tucker served as the senior editor. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mksc.2022.0383. [ABSTRACT FROM AUTHOR]