Business Mergers

February 9, 1955

Report Outline
Rections to Recent Wave of Mergers
Reasons for New Merger Movement
Evolution of Legal Restraints on Mergers
Mergers, Competition, and Public Policy

Rections to Recent Wave of Mergers

A Multitude of mergers during the past four years—outstripping anything of the sort since the 1920s—has revived discussion of the whys and wherefores of business consolidation. And it has raised once again the old question of how far the process of combination can go before it does violence to the public interest. Studies conducted under auspices of the Department of Justice and the Federal Trade Commission, due for early completion, may help to provide an answer. However, the factors involved are so many and so complex that it is never certain that today's judgments will hold good under tomorrow's conditions.

Mergers have been on the increase since the outbreak of the Korean war in 1950, but it was last year's flood of business consolidations, affecting some well known corporations, that did moat to stir fears of spreading monopoly and lessened competition. Big-name mergers in 1954 joined such enterprises as the Corn Exchange and Chemical banks in New York, Olin Industries and Mathieson Chemical, Hudson and Nash, Packard and Studebaker, Burlington Mills and Pacific Mills, and General Dynamics and Consolidated Vultee. Major mergers currently planned include consolidation of New York's great Chase and Manhattan banks, of American Woolen, Textron, and Robbins Mills, and of Sunray and Mid-Continent Oil.

One observer has estimated that mergers of important corporations are being effected at the rate of about 45 a month and that probably a score of lesser companies are absorbed daily. Data released by the Federal Trade Commission last October showed that nearly 300 mergers and acquisitions occurred among manufacturing and mining concerns alone during the first half of 1954; the total for the years 1951–1954 probably was around 3,000. These figures may be compared with those for the three earlier merger movements of major proportions. The first great merger period, 1898–1903, was marked by the formation of 234 so-called trusts; the second, 1926–1929, witnessed more than 3,900 mergers; and the third, 1940–1947, about 2,000.

ISSUE TRACKER for Related Reports
Antitrust and Monopolies