The United States - and for that matter the world - is going
through the biggest wave of corporate mergers and acquisitions in
history. In the process, the American economy is being drastically
restructured. And there's more to come, the experts say.
Is that good or bad?
You aren't hearing any real debate about the merits of this
extraordinary trend in the presidential campaign. Though mergers are
affecting millions of Americans, the topic is not considered a vote-
Neither Vice President Al Gore nor Texas Governor George W. Bush
have offered a detailed plan for dealing with the increased
concentration of economic power.
So far, it appears that Mr. Gore is an adherent of the Clinton
administration's relatively strong antitrust policy.
But Mr. Bush is more of a mystery. Will he follow the somewhat
less-tough policy of his dad, former President Bush, or the laissez-
faire policy under the Reagan administration?
Albert Foer, president of the American Antitrust Institute, a
Washington think tank, wonders if Bush has "a strong but secretive
attitude" on antitrust policy which might come out after the
election. It would be revealed in his appointment of chiefs of the
Justice Department's antitrust division and the Federal Trade
Commission (FTC), the two antitrust watchdogs in the US.
[Joel Klein, head of the antitrust division, last Tuesday
announced his resignation. He has been chief architect of the case
against Microsoft Corp.]
Yet the impact of mergers on business competition is crucial.
"An enlightened antitrust policy is essential to the vitality of
the innovative companies which provide the foundation for American
prosperity," says Peter Morici, an economist at the University of
Maryland's business school, in College Park.
"We have got a merger a day now," says Paul Juhasz, of Thomson
Financial Securities Data, a Newark, N.J. firm that keeps track of
That's an understatement. Thomson's own data show there have been
7,583 deals so far this year of companies valued at a total of
$1.34 trillion. By year end, 2000 could break the 1998 $1.6
In the financial area alone, there have been $494 billion in
takeovers and mergers this year.
"Sooner or later it is going to have to slow down or we are going
to have one big company [on Wall Street]," says Mr. Juhasz.
In total, there have been $6.5 trillion worth of deals in the US
since 1995, $12 trillion worldwide.
In comparison, the total output of goods and services in the US
this year will amount to almost $10 trillion. …