Word: clorox
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Dates: during 1960-1969
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These days the Government seldom loses an antitrust case in the Supreme Court. And last week the trustbusters won big. In a unanimous decision, the court agreed with the Federal Trade Commission's contention that the ten year-old Procter & Gamble-Clorox Chemical merger violated the Clayton Antitrust Act and should be dissolved...
...understandably disappointed, and so was the rest of the business community. Noting that the P. & G.-Clorox link seemed neither vertical (between suppliers and customers) nor horizontal (between competitors), businessmen had hoped that either way the decision went, it would mark the first clear-cut application of antitrust law to a conglomerate merger (between companies in unrelated fields). And court-devised guidelines were anxiously awaited, for conglomerate unions today account for 70% of mergers...
...merger "may substantially lessen competition or tend to create a monopoly in the production and sale of household liquid bleaches." P. & G., he noted, was the nation's leading sales promoter in 1957 -and it still is, spending $245 million on advertising and promotion annually. When it bought Clorox, it was latching onto the leading producer of bleach, which controlled 48.8% of the market...
...applying its "huge assets and advertising advantages," contended Douglas, P. & G. could dissuade new companies from entering the bleach business, to say nothing of intimidating those already in the industry. As a P. & G. subsidiary, Clorox would be in a perfect financial position to wage price wars against competitors. Since P. & G. could have developed its own bleach, it seemed clear to Douglas that it had bought Clorox instead, "to capture a more commanding share of the market...
Pending Guides. How are Turner and his men to deal with such problems? Neither Congress nor the courts have thus far spelled out specific rules covering conglomerates. The first firm guidelines may come before summer, when the Supreme Court is expected to act on the acquisition of Clorox bleach by Procter & Gamble...