  I present a structural empirical model of a one-sided one-to-many matching
with complementarities to quantify the effect of subsidy design on endogenous
merger matching. I investigate shipping mergers and consolidations in Japan in
1964. At the time, 95 firms formed six large groups. I find that the existence
of unmatched firms enables us to recover merger costs, and the importance of
technological diversification varies across carrier and firm types. The
counterfactual simulations show that 20 \% of government subsidy expenditures
could have been cut. The government could have possibly changed the equilibrium
number of groups to between one and six.
