This paper explores the extent to which capability analysis can inform competition authorities’ analysis when they assess mergers’ effect on innovation. In a first section, we show how the EC Dow Dupont merger decision, which included for the first time a systematic analysis of the innovation capabilities of the various players in the crop protection sector, was based on a somewhat simplistic consideration of the unilateral effect of the merger on the incentive of the merging parties to innovate. In a second part, we show that since that decision, the analysis of the effects of a merger on the incentives to innovate has become more sophisticated and that it is now acknowledged, at least by some competition authorities, that merger analysis should consider a variety of possible effects on incentives to innovate. In the third section, we argue that in addition to the effect of mergers on incentives to innovate, the financial and technological capabilities of the merging firms and their competitors should be considered to assess the effect of mergers on innovation. We show that the empirical literature on business economics can provide helpful guidance on how to assess these capabilities. In the final section, however, looking at the poor performances of Boeing post-merger with McDonnell Douglas, we ask how the managerial capabilities of the merging firms and of their competitors to innovate, which also matter, can be taken into consideration in the context of merger control.