Why megamergers may hurt consumers
The corporate merger-and-acquisition wave rushes on. The pace is the fastest ever on a worldwide basis, a near-record in the United States.
Company executives and publicists trumpet the efficiencies and savings that will result from the new combination.
There's another side.
North Dakota's Senator Byron Dorgan (R) speaks of "an orgy of mergers ... that is alarming."
"Our job," he adds, "is to safeguard the marketplace so it is free and open for competition. It is high time we take a fresh look at antitrust laws and the enforcement of these laws."
Notes Washington economic consultant Charles McMillion: "The era of big sovereign governments may be over. The era of big bureaucratic labor may be long gone. But the era of really big, global business and private oligopoly power seems to be just beginning."
The merger boom, says merger expert James Brock, is largely driven by CEOs with "sheer unadulterated egos" seeking market dominance. And often the fatter salaries that come with bigger companies.
"It is the kind of market power not dreamed of being attempted except in the past few years," says the Miami University of Ohio professor.
Senator Dorgan, together with Sen. Paul Wellstone (D) of Minnesota, two weeks ago introduced a bill that would put a moratorium on giant combinations in the agribusiness area.
The dog was put among the chickens by the megamerger between Cargill and Continental Grain companies. "Something's wrong" with the antitrust laws, Dorgan said in an interview.