Word: antitrusters
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Dates: during 1960-1969
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...Hill, too, the conglomerates have come under increasing fire, and Congress is considering bills to end favorable tax treatment of the debentures that are often exchanged in conglomerate takeovers.* Rather than wait for such legislation, though, Attorney General John N. Mitchell elected to bring a test case under existing antitrust...
...have interpreted that law to forbid most "horizontal" mergers between competitors and, to a lesser extent, "vertical" mergers with suppliers or customers. But the courts have said little about corporate takeovers of companies in entirely different fields. Mitchell's chief trustbuster, Richard McLaren, plans to invoke the Clayton Antitrust Act's Section Seven, which prohibits corporate acquisitions that substantially lessen competition. He may well cite the anti-competitive potential of reciprocal purchasing arrangements, under which LTV subsidiaries, which use large amounts of steel, might favor J. & L. rather than go to the marketplace for the best deal. Beyond...
...McLaren, said that his department may bring suit to break up some conglomerate mergers that have already taken place. McLaren thus goes beyond his Democratic predecessors, who showed no inclination to test their legal power to fight conglomerates. If McLaren sues, he will invoke Section 7 of the Clayton Antitrust Act, which prohibits corporate acquisitions that "substantially" lessen competition. Meanwhile, Congress is considering a bill to end the favorable tax treatment accorded to companies that issue debentures to pay for mergers...
...Complaints. On June 1, with the approval of Japan's rather toothless antitrust watchdog, the Fair Trade Commission, Fuji and Yawata will form the New Japan Steel Co., the world's second largest steel company after U.S. Steel Corp. Last year the two partners produced 25 million tons v. U.S. Steel's 32 million; they had sales of $2.5 billion. Under the presidency of Yoshihiro Inayama, now the chief of Yawata, the new company will employ 80,000 people in ten huge, highly integrated mills throughout Japan...
McLaren may not have an easy time cutting down the conglomerates. Their growth stems largely from the vagaries of antitrust law?and there is still considerable question about whether the Government has the legal power to stop the trend. Diversification by merger has long been an attractive tactic for industrialists who were anxious to reduce profit-sapping fluctuations in the demand for individual goods and services. It is easier and quicker to diversify by buying a going concern than by starting from scratch. But Government antitrust barriers often stand in the way of combinations within a company's own field...