Mergers in Perspective

Mergers in Perspective

Mergers in Perspective

Mergers in Perspective

Excerpt

The United States has the world's most stringent merger laws. While policy in most other countries has aimed at encouraging mergers or has been neutral, that in the United States has been manifestly hostile to this activity.

The chief difference in the design of domestic and foreign merger policy is the lively sense displayed abroad of the economic gains that size confers. Europe's post-World War II economic policies, for example, deliberately aim at producing an economic structure comparable to that of the United States. In particular, the European Economic Community (EEC) was intended to provide a market large enough to support firms as big as those in the United States. "The EEC's industrial policy is to encourage size," writes The Economist, Britain's prestigious weekly. The policies followed in individual countries are consistent with this approach.

Particularly in France, but to varying degrees in other countries as well, mergers are encouraged or tolerated as a way of setting the units of the national economy on a level equal to that of competitor nations. The active concern of policy makers in Europe is not the prevalence of . . .

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