About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

65 Neb. L. Rev. 813 (1986)
The Proposed Emasculation of Section 7 of the Clayton Act

handle is hein.journals/nebklr65 and id is 823 raw text is: Walter Adams* James W. Brock** The Proposed Emasculation of Section 7 of the Clayton Act The Reagan Administration's recent legislative proposals for anti- trust reform would, if enacted by Congress, mark an historic reversal of the nation's anti-merger policy. They would significantly relax ex- tant statutory prohibitions against potentially anticompetitive merg- ers and acquisitions. They also would empower the President to grant relief to import-impacted industries by temporarily exempting them from the anti-merger laws. The Administration's rationale seems to be that past merger policies are responsible for the declining interna- tional competitiveness of American firms, and that those policies have deprived American industries of the ability to restructure themselves in order to achieve (or regain) world-class competitive status. POSTULATES UNDERLYING THE MODERNIZED SECTION 7 OF THE CLAYTON ACT Unfortunately, these proposed revisions are based on six postulates which are asserted with axiomatic confidence, but which lack empiri- cal support. First, the Administration believes that overzealous anti-merger en- forcement has prevented American companies from engaging in merg- ers and acquisitions. This is incongruent with the facts: Megamerger mania has engulfed American industry since the 1970s. Between 1970 and 1984, some 44,200 mergers and acquisitions were consummated in the United States. In 1984 alone, mergers and acquisitions totalled 2,543. The total value of all U.S. acquisitions reached an all-time rec- ord high of $82.6 billion in 1981, and established new records of $122.2 billion in 1984, and $179.6 billion in 1985.1 The very largest corpora- tions in the country have been in the forefront of the merger wave, not only acquiring small and medium-sized companies, but-in- * Distinguished University Professor and past President, Michigan State Univer- sity. Member of Attorney General's National Committee to Study the Antitrust Laws (1953-55). ** Associate Professor of Economics, Miami University (Ohio). 1. W.T. Grimm & Co., MERGERSTAT REV. 1984, at 6; Vartan, New Climate for Merg- ers, N.Y. Times, Mar. 13, 1986, at D10, col. 2.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most