Mergers and Acquisitions - Administering the Merger Review Process at the FTC
14 Jun 2008 | Category: uncategorized | Author: admin
One of the primary duties of the Federal Trade Commission is to over see Mergers and Acquisitions in industry to prevent one company from inadvertently growing so large that it corners the market and thus becomes a monopoly inhibiting competition in the market place. Administering the Merger Review Process at the FTC is not an easy task and it maybe a good thing as they do not manage these things very well anyway. In fact many times when one company wishes to merge with another the FTC kills the deal by wasting weeks to review all the information and thus hurts both companies making them weak. This hurts shareholder's equity, quarterly profits and therefore the company has to raise prices hurting consumers to re-coup the money lost during the transition.
Here is how the FTC describes their efforts and if you do not mind me saying so, I believe embellishes their abilities, as I believe their piss poor performance in this regard is appalling to say the least:
"The FTC administers the Hart-Scott-Rodino (HSR) Pre-merger Notification Program for both the FTC and the Department of Justice (DOJ). Increasing economic activity and a corresponding increase in merger notifications resulted in review of transactions valued at more than $1.1 trillion in FY 2005. The HSR program protects consumers by identifying potentially anticompetitive mergers and providing the antitrust agencies with the opportunity to prevent harmful mergers from taking place."
First off the amount of dollars of the transactions is irrelevant as this is a large economy. Second they do not state how much their miss management has cost the market place in efficiency. Although one could say; How would the FTC know anything about efficiency, as they are part of a bigger picture, the blob of bureaucracy. Consider this in 2006.
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