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71 Cal. L. Rev. 348 (1983)


This Article argues that the Department of Justice's recently articulated enforcement intentions with respect to conglomerate mergers are inconsistent with the case law applying section 7 of the Clayton Act to these transactions and also represent unsound policy. Part I will review the conglomerate merger jurisprudence of the past two decades - looking at the theories that have been used to challenge them, at the important judicial decisions interpreting and applying those theories, and at the Guidelines adopted by the Department of Justice in 1968 to codify these developments. It will then briefly discuss certain developments regarding conglomerate mergers the past half-dozen years - the judicial rejection of most challenges to these transactions, scholarly attacks on the underlying theories, and the enormous expansion of the number and size of conglomerate mergers taking place. Part II will then examine the new Merger Guidelines. The way in which the new Guidelines treat conglomerate mergers will be compared with the case law standards and with the 1968 Guidelines. Based on a broad view of the goals of the antitrust laws, this Article will then assert that the Guidelines take far too narrow an approach to the scrutiny of conglomerate mergers. The Article will conclude with some recommendations for future conglomerate merger law enforcement.


Reprinted with permission of the California Law Review.



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