The nouvelle vague among prominent U.S. public policy spokesmen is the facilitation of corporate mergers and acquisitions, the promotion of corporate bigness, and the emasculation of the anti-merger law. They claim that this kind of bold new departure is needed to enable firms in the United States to challenge large foreign rivals and regain global competitiveness. These pronunciamentos, and the Weltanschauung which they reflect, are hardly novel. In form and substance, they are an uncanny (and not very imaginative) reincarnation of the mindset that governed economic policy making in Europe in the 1950s and 1960s. Then, as now, bigness was believed to be an essential prerequisite for global competitiveness. Then, as now, policymakers believed their domestic industries to be helpless before the onslaught of giant foreign companies. Then, as now, consolidation and megamergers were believed to be a critical tool for combating le defi americain. In this context, we shall explore these questions and trace the European experience with merger-induced giantism. Proceeding on a country-by-country basis, the rationale undergirding the corporate consolidation policies and their impact on economic performance will be reviewed. For comparative purposes, the Japanese experience (which runs counter to current popular mythology) will be contrasted with that in Europe. Finally, in our conclusion we shall discuss some implications of our analysis, one of which is that merger-induced giantism is not the key to increased competitiveness.
Walter Adams and James W. Brock,
The Bigness Mystique and the Merger Policy Debate: An International Perspective,
Nw. J. Int'l L. & Bus.