4.12.10 – Lecture Notes, Econ 201

4.12.10 – Lecture Notes, Econ 201 -...

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4.12.10 – Lecture Notes, Econ 201 TOWARDS MERGERS - Definition: Act of combining two or more firms to form a larger unit HISTORY - Number of mergers has fluctuated greatly over the last 100 years - Waves of Mergers: Merger Mania o 1890-1905 – Horizontal o 1915-1929 – Vertical o 1965-1989 – Conglomerate o 1997-2007 – All  TYPES OF MERGERS - Horizontal:  Among firms in the same industry o Delta & Northwest Airlines - Vertical:  Among firms at different stages in the production process of an industry o Resources   Production   Retailing  - Conglomerate:  Among firms in different industries o LAW 1. Clayton  Act – 1914  a. Section 7  a.i. “Mergers that substantially lessen competition”  2. Current Interpretation: a. In recent years, only about 2% of the mergers are challenged by the Justice Department b. Virtually no conglomerate and vertical mergers are challenged
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This note was uploaded on 10/13/2011 for the course EC 201 taught by Professor Haider during the Spring '10 term at Michigan State University.

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4.12.10 – Lecture Notes, Econ 201 -...

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