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| IS BIGGER BETTER?
How will the recent wave of mergers affect the nation? June 2, 1998 |
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Questions asked
in this forum:
What is the correlation between mergers and the strength of the economy overall? How will the recent wave of mergers affect the consumer? Does the recent wave of mergers mean fewer rights for labor? In this emerging global economy, how do mergers affect third world countries? Is bigger better?
NewsHour Coverage
May 26, 1998:
A discussion on the recent wave of mega-mergers.
May 11, 1998:
SBC Communications acquires Ameritech Corp.
May 7, 1998:
Daimler-Benz purchases Chrysler Corp.
April 24, 1998:
Some of the nation's biggest airlines announce marketing alliances.
April 13, 1998:
Two more bank mergers are proposed.
April 7, 1998:
Citicorp and Travelers announce the largest merger in corporate history.
November 10, 1997:
World Com and MCI announce its $37 billion merger.
July 23, 1997:
The EU approves the Boeing-McDonnell Douglass merger.
Browse the NewsHour's coverage of business and economy and transportation.
Merger mania has struck Wall Street.
From banking to transportation, nearly every sector of the American economy has been affected by the recent wave of mega-mergers, which have included NationsBank and Bank of America, World Communications Inc. and MCI, Boeing and McDonnell-Douglas, Citibank and Travelers, and Diamler-Benz and Chrysler. Last year alone, mergers involving American companies totaled a record $1 trillion. And already in 1998, four of the five biggest mergers in U.S. corporate history have been proposed.
In a discussion on The NewsHour, Dr. Fred Weston, professor of economics at UCLA, cited the "globalization of competition" as a major reason for the recent merger craze. With the emergence of a global economy, companies have been forced to seek new ways to become more competitive on an international scale. By merging with a rival, companies argue it can slash operating costs, increase efficiency and obtain a greater global reach.
But does bigger necessarily mean better?
Despite Wall Street's bullish reaction, consumer advocates worry that a lack of competition will increase prices, reduce selection and stifle innovation.
What do you think? Is the recent wave of mergers good for consumers? What do they tell us about the economy? What will be the impact on the labor market?
Answering your questions are Fred Weston of UCLA and Walter Adams of Michigan State University. Professor Weston teaches mergers and acquisitions at the Anderson School of Management at UCLA and Professor Adams is past president of Michigan State University.
What is the correlation between mergers and the strength of the economy overall? How will the recent wave of mergers affect the consumer? Does the recent wave of mergers mean fewer rights for labor? In this emerging global economy, how do mergers affect third world countries? Is bigger better?
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