Word: mergers
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Dates: during 1960-1969
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Only last December, the Federal Communications Commission agreed that a merger designed to turn Interna tional Telephone & Telegraph Corp. and American Broadcasting Co. into a $2 billion telecommunications company was a good idea. Last week the FCC changed its mind. The reason for the reversal was simple: the merger is being strongly protested by the Justice Department's antitrust division - an agen cy that easily outranks the FCC in Wash ington's hierarchy. Bowing to the anti trust division's argument that the ITT-ABC merger might impede competition and open ABC public affairs pro gramming...
Sophisticated Dangers. Plaguing Turner even more than the sheer volume of mergers, though, is the changing nature of such activity. Once, most corporate marriages were either vertical (between suppliers and customers) or horizontal (between competitors). The Sherman and Clayton antitrust acts defined the terms for such mergers, and the Supreme Court interpreted the definitions in their strictest sense. Laws and precedent are much murkier regarding the "conglomerate" unions that now account for 70% of merger activity...
...conglomerate merger, a company takes over another in a different field, as in last week's announcement that tobacco-producing P. Lorillard Co. is planning to consolidate with Schenley Industries (see following story). To the trustbusters, conglomerate mergers offer some sophisticated dangers. Potential stifling of competition-as in the ITT-ABC case-is one. Another is reciprocity. One circumstantial example of reciprocity currently cited by Government lawyers involves Armour & Co., which as a meat packer is a major customer for railroad shipping space. Armour, in a conglomerate merger, bought out Baldwin-Lima-Hamilton, a manufacturer of railroad equipment...
...professional's market, with pension funds, mutuals, and merger-bent corporations among the big buyers. Small investors have become a dwindling factor. So far this year, odd-lot trading (blocks of less than 100 shares) has dropped to the lowest percentage of total volume-12.3%-since brokers began keeping track...
Itself the prosperous product of a 1960 merger of 101-year-old Henry Holt & Co. and two other houses, Holt depends on its school texts and other educational materials for 80% of its business. Its general book division, which has published Robert Louis Stevenson, William James and Robert Frost, has declined to 7%. For the rest, Holt has not only a growing business in educational movies and other teaching aids, but a group of four magazines, including that staunch sportsman's standby Field & Stream. Overall earnings last year rose 28%, to $6.6 million on sales of $70 million-enough...